Lady Bird Deeds in South Florida
In Florida, property owners have the ability to utilize a very interesting estate planning mechanism known as the Lady Bird Deed or enhanced life estate.
This opportunity is unique to Florida and a few other states. By executing a Lady Bird Deed, an owner of real estate can provide for an automatic transfer of the property upon the owner’s death to the owner’s intended beneficiary. If completed properly, a Lady Bird Deed will avoid the need to conduct a probate of the owner’s estate in order to transfer title to the property.
The beauty of the Lady Bird Deed is that the owner of the property (who becomes the life tenant) maintains the complete power to do whatever he or she wants to do with the property during their lifetime (full authority to sell, convey, mortgage, lease, or otherwise manage and dispose of the property) without the permission of or the signature of the beneficiary who will inherit the property. The retention of these powers in the owner/life tenant – is what makes this type of life estate “enhanced.”
This also means that the property owner retains the complete power to change his or her mind – they can deed the property to someone else or back to themselves – basically rolling back or rescinding the right of the beneficiary to inherit the property.
If a property owner executes a Lady Bird Deed and makes no other changes – upon the property owner’s death the property will automatically be inherited by the beneficiary identified in the Lady Bird Deed. This transfer is automatic and avoids the expense and time of probate.
If the property is the homestead of the owner – it is important to state clearly in the Lady Bird Deed that the property will remain the life tenant’s homestead – so that the homestead exemption will be maintained until the life tenant’s death.