Lady Bird DeedA Lady Bird deed, or enhanced life estate deed, allows property to pass automatically to one or more designated recipients at death without the need for Florida probate. The process begins by a grantor signing a deed to a grantee, but retaining the right to sell, use, and otherwise manage the property during the grantor's lifetime. Upon the grantor's death, the grantee files the grantor's death certificate in the land records, serving as proof of death, and the property then passes directly to the grantee without the need for probate.

Advantages of Lady Bird Deed

A major benefit of using a Lady Bird deed rather than a traditional life estate deed is the retention of authority over the property during the life of the grantor. While a traditional life estate deed allows the grantor to use the property during his life, the grantor loses the option to change his mind. Once a traditional life estate is conveyed, the grantor may not sell, mortgage, convey, gift, or otherwise terminate the interest of the remainder beneficiaries without the consent of the grantee.

While a Lady Bird deed is similar in the sense that it allows the grantor to convey a future interest in the property and maintain a life estate, the Lady Bird deed also has the added benefit of maintaining complete control of the property during the grantor's lifetime. The grantor may sell, use, and mortgage the property during his lifetime without requiring consent of the remainder beneficiaries. Also, while the grantor of a traditional life estate deed may have to pay gift taxes for transferring the remainder interest, the grantor of a Lady Bird deed does not. This is so because the grantor retains the right to cancel the remainder interest conveyed to the beneficiary.

Maintaining Eligibility for Medicaid Benefits

It is also important to note that, generally, a traditional life estate deed triggers a five year waiting period for Medicaid benefits. However, an added benefit of using a Lady Bird Deed is that the execution of such a deed is not be considered a transfer of ownership (i.e., a gift) for purposes of applying for Florida Medicaid benefits. Using a Lady Bird deed in combination with the grantor's expressed "intent to return" to the property after being taken to nursing home, or the retained residence by their spouse, can have the advantage of avoiding the five year penalty period because the gift can always be revoked.

Tax Consequences of a Lady Bird Deed

There are no tax consequences to an enhanced life estate deed as there is no completed gift for estate tax purposes. This means that upon your death, the property will be distributed to the beneficiary with a step-up in basis, meaning the heirs will now be able to sell the property tax-free. Also, the grantor gets to maintain their homestead for property tax purposes.

Home Refinance Issues

While the enhanced life estate deed will generally allow you to refinance, sell, give away, etc., your home without the joinder of the grantee(s), some banks/lenders will not allow a mortgage on a property where an enhanced life estate deed has been done. So if you ever think about refinancing your home, an enhanced life estate deed may not be for you. Of course, a real estate attorney can always fix the problem, but it will be frustrating when you are refinancing your home, for instance, and the lender will not allow the refinance as you previously created an enhanced life estate deed.

Learn More About Lady Bird Deeds

If you want to learn more about Lady Bird deeds, we have more information here.

You may also want to consider creating a revocable living trust in order to avoid probate, which is generally a better way to avoid probate under most circumstances.

D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney
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Lisa 12/12/2020 07:43 AM
We live in NC and my father had a lady bird deed. My sister and myself as the beneficiaries. Father passed away and my sister has passed away also. Because my sister has passed, does house go directly to me or is her spouse considered a beneficiary?
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Rep DeLoach 12/13/2020 02:05 PM
Lisa, First, we are sorry to hear about the death of both of your family members. On your question, the likely answer is that the deed is payable one-half to you and one-half to your sister's estate, meaning that while the property is not subject to your father's probate, your sister's portion is most likely part of her own probate estate, subject to her own will, or if she did not have one, subject to the laws of intestacy. An attorney (like us) can review the deed to confirm, but this is the likely outcome. This is one of the main disadvantages of a lady-bird deed - they do not do a good job of contingency planning, such as when a beneficiary dies. We are glad to review things if you want to call our office. Thank you!
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Ajay Mehta 02/02/2021 01:13 AM
Does executing the Lady Bird Deed in California before 2/15/2021, retain the current property tax basis before Prop 19 goes into effect on 2/16/21. With Lady Bird Deed, is the Step Up in Capital Gains available at the time of the Grantor's death?
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Rep DeLoach 02/02/2021 08:49 AM
Ajay, I am only able to comment on Florida law. I understand that California uses lady bird type deeds, but a California attorney will have to address your inquiry. Thank you for your question!
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Leslie Allard 02/26/2021 10:30 PM
Would it matter if her sister died before her father.
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Rep DeLoach 03/01/2021 12:49 PM
Leslie, if one beneficiary (grantee) of a lady-bird deed dies before the grantor, then the deed is payable, at least partly, to the deceased beneficiary's estate - meaning a probate would need to take place for the share of the property payable to that beneficiary. So, we do not recommend lady-bird deeds for multiple beneficiaries in most circumstances.
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Pat 03/10/2021 09:03 PM
I have a lady bird deed on my home in Florida naming my two sons as the beneficiaries. I was just denied a refinance on my home and now am regretting my decision. Is a lady bird deed revocable and how?
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Rep DeLoach 03/12/2021 02:51 PM
Pat, I understand your frustration on the lady-bird deed. Lenders sometimes, but not every time, have a problem with a lady-bird deed. A real estate attorney can prepare a deed "undoing" your current enhanced life estate deed, which will allow you to re-finance your home. We are glad to help you with this if you are local.
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Ruth Kaplan 08/06/2021 07:47 PM
I have an enhanced life estate deed here in FL and am planning to sell my home in January. Is there anything I need to do before putting the house on the market? Do I need to file a quit claim deed?
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Rep DeLoach 08/08/2021 12:44 PM
Ruth, there is nothing in particular that needs to be done when you sell your property that has the enhanced life estate deed. The deed itself gives you the ability to sell without anyone else's permission so you should not have any problems at all when you go to close. Thank you for the question!
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Sharon Slonim 01/12/2023 03:23 PM
My Husband died September 2022 I am co owner of our home regarding the deed but he had money in bank for his business how do I obtain that money ?
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Rep DeLoach 01/12/2023 03:59 PM
Sharon, please accept our condolences on your husband's passing. From the sound of it, you may need to probate the business in order to get to the bank account. Basically, probate in Florida is reserved for when someone dies with assets in their own, individual name or if the asset did not have a beneficiary. If the bank account was owned by your husband's business, you will then need to see who owned his business. If the business was owned solely by him, then you likely need to hire a probate attorney to handle this in order to get to the bank account. Our website has a lot of information on the probate process. If you live in our area, we may be able to help you. The key question is what type of business was it and how was the interest in the business owned (i.e., is it a corporation, LLC, sole proprietorship) etc. A good probate attorney can help determine if probate for the business is needed.
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Barbara 02/02/2023 03:45 PM
My husband and I are joint owners on our property deed. We have no life estate or trust. So if one of us passes, do we have to go through probate?
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Rep DeLoach 02/02/2023 03:52 PM
Barbara, Good question! If you jointly own your home with your husband, there is no probate if something happened to one of you. The home would 100% be owned by the surviving spouse. The home would go through probate if something happened to the both of you, so a Lady BIrd Deed may be useful if you care about avoiding probate if something happened to the both of you at the same time or something. Probate only occurs if you die with assets in your own, individual name, so your home being held jointly does not go through probate, so you can sleep easy.
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Michael 11/02/2023 4:22 PM
We are considering to use Lady Bird Deed as our way for estates planning. We are Florida residents. We understand that that Deed could be revoked later. This is our question: If remainderman predeceases surviving spouse, can that spouse revoke previously drafted Lady Bird Deed? Also, if surviving spouse becomes incapacitated, can Durable Power of Attorney Agent changes or revoke that Deed and draft new one with different beneficiary?
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DeLoach, Hofstra & Cavonis, P.A. 11/10/2023 9:24 AM
Michael, while lady-bird deeds are useful, they do not provide great long-term planning as the deeds do not have a lot of flexibility. To answer your specific question, a surviving spouse can always revoke a previously drafted lady bird deed. If a person is incapacitated, it is possible that a power of attorney could change the beneficiary but the circumstances depend on having a good durable power of attorney prepared by an attorney and last will and testament. We mostly think about using revocable living trusts for good probate avoidance planning as the trust is more flexible and provides for better contingencies.
Bonnie Rust 05/09/2024 6:38 PM
I am considering doing a lady bird deed on my house as a quick way to protect it from going into probate court if I die but a friend of mine did that and was never told that was a title change on the deed and her property taxes went up 25% and she was not informed that this would happen. I’m not sure what is going to happen in the next year or so due to cancer. I’m not sure if I’m going to sell and move before the next tax bill is due next November.
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DeLoach, Hofstra & Cavonis, P.A. 05/10/2024 8:28 AM
Hello! Doing a lady-bird deed (i.e., enhanced life estate deed) does not create a change to your real estate taxes. I am not sure what happened to your friend but doing this type of deed is not an actual transfer of your property to someone else, so it does not affect your homestead or real estate type taxes in Florida. When you die, the taxes will be adjusted for your heirs but not during your lifetime.
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