Using Lady Bird Deeds to Avoid Probate and Save Your Home from Medicaid Recovery

Florida is one of only 5 states in the United States that allows real estate to be transferred to others automatically upon your death while maintaining use, control, and ownership while you are still alive.

The person who holds title to a “lady bird” deed continues to maintain control over the property during his or her lifetime which allows them to maintain ownership, use the property, sell the property and keep the proceeds and do whatever they want without the involvement of the “remainderman”.

The remainder beneficiaries (or “remainderman”) have no rights to the property during the lifetime of the life estate holder (the owner).  Upon the death of the owner or owners, if held by more than one owner, the property automatically passes to the remainder beneficiaries upon the death of the life state holder without going through probate.

A common example of a "lady bird" deed is when a husband and wife, as grantors, quit claiming their home to themselves as grantees stating upon the death of both grantors, the property will pass automatically to their daughter.

The benefits of Florida “lady bird” deeds are (1) they avoid probate as the property passes automatically upon death to the grantors; (2) they allow the property owner complete control over their property during their lifetime, including the right to change their mind as to the remainderman; (3) Florida homestead exemption (both as to protection from creditors and homestead exemption to property taxes) are not affected; (4) Florida documentary stamps are not required to be paid because the transfer occurs only upon death of owners; (5) there are federal tax savings when determining the stepped up bases as the transfer uses the value of the property as of the date of death of the owners and (6) the home is not subject to a Medicaid lien and the 5 year look back rule does not apply.

If you would like to schedule a consultation with LaRue Williams concerning “Lady Bird” deeds and/or Estate Planning, please contact 386-353-1561 ext. 120.