What is a Florida Lady Bird Deed?
A Florida Lady Bird Deed is a special type of deed that can allow for the automatic transfer of real estate at death.
“If you do not plan for your property after you pass away, the government and the courts have a plan for you. And, it is probably going to be much more expensive than consulting an attorney”
How does a Florida Lady Bird Deed work?
A Lady Bird Deed is a legal document that allows a property owner (the grantor) to retain full ownership rights and occupancy over a property for their lifetime. The grantor will also be the "life tenant" of the property. Then, at their death, they can designate the next owner of the property (the grantee beneficiary). This might sound similar to another type of deed known as a Life Estate Deed. In fact, a Lady Bird Deed is also known as an "enhanced" life estate deed. The difference is with a Lady Bird Deed the grantee beneficiary inheriting the property does not receive any rights in the property until the death of the grantor/life tenant. With a regular life estate deed, the grantee beneficiary/remainderman does not receive the property until the death of the grantor/life tenant, but has rights in the property NOW.
The great advantage of the Lady Bird deed is that it can be changed or revoked by the grantor/life tenant at anytime. With a regular life estate deed, you cannot remove the remainderman inheriting it without their permission because they own the remainder immediately upon execution of a deed.
What about probate?
When a person dies, all of the property in their own name must go through probate court to be inherited. This happens whether they have a will or not. The probate process in Florida is long and expensive. It almost always takes seven months, usually more, and costs thousands of dollars. To avoid probate, you need to make sure your assets are not probate assets. One way to do this is by placing your property in a living trust. Another way is to designate your financial accounts with automatic pay on death beneficiaries. Finally, a great way to avoid probate with real estate is to create a Lady Bird Deed, especially if your estate does not warrant the creation of a living trust.
Under the terms of a Lady Bird Deed, property passes automatically to the grantee beneficiary at the death of the grantor. All that has to happen to clear title usually is to file and record a death certificate and DR 312 tax form with the Clerk of Court in the county where the real estate is located. If real estate passes as a gift through a will, it will usually take seven months, or more, for the title of the property to pass to the person inheriting it. During that time, your heirs will have to pay taxes, upkeep, and it will be VERY difficult to sell the property if that is what is wanted. You can avoid all that expense and delay with a professionally created Lady Bird Deed.
How can this be avoided?
Many people, even those with substantial means, do not like to think about death. People think that by not acknowledging the future, they somehow can avoid the consequences. But, sure as the sun rises in the East, the future comes. So, you can either be prepared or unprepared, but time is marching on just the same. Getting your affairs in order is a great gift for your family.