You may have heard the term Lady Bird deed and wonder what exactly it is and how it differs from a regular deed.
A lady bird deed is a deed with a life estate. It is also sometimes called an enhanced life estate deed. It lets a property owner maintain control of a piece of property until their death. Upon their death, the property automatically transfers to a selected beneficiary without going through the probate process.
Advantages to a lady bird deed
There are many benefits to a lady bird deed. One of the main advantages is the ability to avoid the probate process, which can be long and expensive. A lady bird deed gives you the reassurance that your loved ones will receive your property without the potential complications of going through probate.
There are also tax and Medicaid benefits to a lady bird deed. A lady bird deed is not subject to a federal gift tax and is not counted as an asset for Medicaid purposes. Additionally, the state cannot claim the property to recoup Medicaid costs after your death, since it is not considered part of your estate.
What happens if I change my mind?
You maintain control of your property during your lifetime. This means that if you want to change your lady bird deed, by giving the property to someone else, or even revoke it altogether and sell the property, you can. Your beneficiary has no control over the property until after your death.
Florida is one of only five states that offer a lady bird deed as an estate planning tool. You will need to have certain information to set up a lady bird deed, including the names of your intended beneficiaries and a legal description of the property.
To be valid, your lady bird deed needs to be notarized and filed with your local registrar of deed. An estate planning attorney can help draft your lady bird deed and ensure you comply with all requirements.
