Lady Bird deeds, explained for Florida homeowners

A Lady Bird deed, formally called an enhanced life estate deed, is a widely used estate planning tool for Florida homeowners. It allows you to decide now who will receive your home when you pass away, without giving up any control over the property during your lifetime.

How a Lady Bird deed works

With a Lady Bird deed, you keep what is known as an enhanced life estate, and you name one or more people, called remainder beneficiaries, to receive the home at your death. During your lifetime:

• You may live in, sell, rent, mortgage, or refinance the home without the beneficiaries' consent.
• You may change the beneficiaries or revoke the deed at any time.
• Your beneficiaries have no ownership rights in the home until your death.

The benefits for Florida homeowners

• The home passes directly to your beneficiaries at your death, without probate.
• Your Florida homestead exemption and Save Our Homes assessment limitation generally remain in place.
• The deed is generally not treated as a taxable gift, and your beneficiaries generally receive a step-up in income tax basis, which can reduce capital gains tax if they later sell the home.
• Because the home does not pass through probate, it is generally not subject to Florida Medicaid estate recovery.

When to take a closer look

A Lady Bird deed is not the right fit for every family. Additional planning is often needed when:

• The home is owned jointly with someone other than a spouse.
• The home is already titled in a trust.
• You have a blended family, or you want to leave the home in unequal shares or over a period of time.
• A beneficiary is a minor, has special needs, or may have difficulty managing property.
• Medicaid eligibility is a concern, which Spanski Law reviews case by case.

Attorney Season A. Chisholm can help you decide whether a Lady Bird deed fits your overall plan and prepare it to meet Florida's homestead and recording requirements. The first step is a complimentary 15-minute call or in-person consultation.