Lady Bird Deed Florida: Transferring Property to a Loved One

Are you looking for a way to transfer property to a loved one without going through the probate process? A lady bird deed in Florida may be the perfect solution. This type of deed allows you to transfer ownership of real estate while retaining a life estate, meaning you can continue to live in the property for the rest of your life.

Lady bird deeds are named after Lady Bird Johnson, the former First Lady of the United States. In 1981, President Ronald Reagan signed the Economic Recovery Tax Act of 1981, which included a provision allowing married couples to transfer real estate between themselves without incurring a gift tax. This provision is known as the "Lady Bird Johnson provision" in honor of the First Lady's efforts to preserve historic properties.

In the next section, we'll take a closer look at how lady bird deeds work, the benefits of using them, and the steps involved in creating one. We'll also discuss some of the potential drawbacks of lady bird deeds so you can make an informed decision about whether this type of deed is right for you.

lady bird deed florida

Transfer property to loved ones, avoid probate.

• Joint ownership with right of survivorship
• Revocable living trust alternative
• Avoid probate and estate taxes
• Retain life estate, continue living in property
• Protect assets from creditors and lawsuits
• Medicaid planning tool
• Simple and inexpensive to create
• Must be recorded with the county clerk
• May have unintended consequences

Speak to an attorney for personalized advice.

Joint ownership with right of survivorship

When you create a lady bird deed, you are essentially creating a joint ownership with right of survivorship between yourself and the person you are transferring the property to. This means that you will both own the property together, and if one of you dies, the other person will automatically become the sole owner of the property. This is in contrast to a traditional joint tenancy, where both owners must agree to sell or transfer the property.

There are several advantages to creating a joint ownership with right of survivorship. First, it allows you to transfer ownership of the property to your loved one without having to go through the probate process. Probate is the legal process of distributing a person's assets after they die, and it can be time-consuming and expensive. By creating a lady bird deed, you can avoid probate and ensure that your loved one receives the property quickly and easily.

Second, a lady bird deed can help you to protect your assets from creditors and lawsuits. If you are sued, your creditors cannot seize property that is owned jointly with someone else. This can help to protect your assets and ensure that your loved one inherits the property.

Finally, a lady bird deed can be used as a Medicaid planning tool. Medicaid is a government program that provides health insurance to low-income individuals. If you apply for Medicaid, the government will look at your assets to determine if you are eligible for benefits. A lady bird deed can help you to protect your assets from Medicaid, thereby increasing your chances of qualifying for benefits.

However, there are also some potential drawbacks to creating a lady bird deed. One drawback is that you will give up your exclusive ownership of the property. This means that you will no longer be able to sell or transfer the property without the consent of your joint owner. Additionally, if your joint owner has financial problems, their creditors may be able to seize the property.

Revocable living trust alternative

A lady bird deed is often used as an alternative to a revocable living trust. A revocable living trust is a legal document that places your assets in a trust during your lifetime. When you die, the assets in the trust are distributed to your beneficiaries. Revocable living trusts can be complex and expensive to create, and they may not be necessary for everyone.

• Avoids probate
  

  Like a revocable living trust, a lady bird deed allows you to avoid the probate process.

• Simple and inexpensive to create
  

  Lady bird deeds are much simpler and less expensive to create than revocable living trusts.

• Retains control of property during life
  

  With a lady bird deed, you retain control of the property during your lifetime. You can sell, transfer, or mortgage the property without the consent of your joint owner.

• Protects assets from creditors and lawsuits
  

  A lady bird deed can help to protect your assets from creditors and lawsuits, just like a revocable living trust.

However, there are also some key differences between lady bird deeds and revocable living trusts. One difference is that a lady bird deed creates a joint ownership with right of survivorship, while a revocable living trust does not. This means that if you create a lady bird deed, your joint owner will automatically inherit the property when you die. With a revocable living trust, you can choose who will inherit the property after your death.

Avoid probate and estate taxes

One of the biggest benefits of using a lady bird deed is that it can help you to avoid probate and estate taxes. Probate is the legal process of distributing a person's assets after they die. It can be a time-consuming and expensive process, and it can also reduce the value of your estate. Estate taxes are taxes that are imposed on the value of your estate when you die. They can also be a significant financial burden for your loved ones.

By creating a lady bird deed, you can transfer ownership of your property to your loved one before you die. This means that the property will not be subject to probate or estate taxes. This can save your loved ones a lot of time, money, and hassle.

For example, let's say you own a home worth $500,000. If you die without a lady bird deed, your home will go through probate. The probate process could take months or even years, and it could cost your loved ones thousands of dollars in legal fees and other expenses. Additionally, your home may be subject to estate taxes, which could further reduce the value of your estate.

However, if you create a lady bird deed, your home will pass directly to your loved one outside of probate. This means that your loved ones will avoid the probate process and the associated costs. Additionally, your home will not be subject to estate taxes.

Of course, there are some potential drawbacks to using a lady bird deed. One drawback is that you will give up your exclusive ownership of the property. This means that you will no longer be able to sell or transfer the property without the consent of your joint owner. Additionally, if your joint owner has financial problems, their creditors may be able to seize the property.

Retain life estate, continue living in property

One of the biggest advantages of using a lady bird deed is that it allows you to retain a life estate in the property. This means that you can continue to live in the property and enjoy all of the benefits of ownership, even though you have transferred legal ownership of the property to someone else.

• Right to live in the property for the rest of your life
  

  With a lady bird deed, you have the right to live in the property for the rest of your life, even if you become incapacitated or need to move to a nursing home.

• Receive all income and benefits from the property
  

  You will continue to receive all of the income and benefits from the property, such as rent, royalties, and profits.

• Make repairs and improvements to the property
  

  You can continue to make repairs and improvements to the property, as long as they do not decrease the value of the property.

• Sell or transfer the property
  

  You can sell or transfer the property, but you will need the consent of your joint owner.

When you create a lady bird deed, you can specify how you want the property to be used after your death. For example, you can specify that the property should be sold and the proceeds distributed to your beneficiaries, or you can specify that the property should be transferred to a trust for the benefit of your loved ones.

Protect assets from creditors and lawsuits

Another benefit of using a lady bird deed is that it can help to protect your assets from creditors and lawsuits. When you create a lady bird deed, you are essentially transferring ownership of the property to your joint owner. This means that your creditors cannot seize the property to satisfy a debt.

• Creditors cannot seize the property
  

  If you have debts, your creditors cannot seize the property to satisfy a debt. This is because the property is owned by you and your joint owner, not just by you.

• Lawsuits cannot force the sale of the property
  

  If you are sued, the court cannot order the sale of the property to satisfy a judgment. This is because you do not have exclusive ownership of the property.

• Protection from nursing home costs
  

  If you need to go to a nursing home, the government cannot force you to sell your home to pay for your care. This is because the home is owned by you and your joint owner, not just by you.

• Protection from lawsuits by your joint owner
  

  If your joint owner sues you, they cannot force the sale of the property. This is because you both own the property, and neither of you has the right to sell it without the consent of the other owner.

However, it is important to note that a lady bird deed does not provide complete protection from creditors and lawsuits. For example, if you and your joint owner both owe money to a creditor, the creditor may be able to seize the property to satisfy the debt. Additionally, if you are sued and the court finds that you are personally liable for the damages, the court may be able to order the sale of the property to satisfy the judgment.

Medicaid planning tool

A lady bird deed can also be used as a Medicaid planning tool. Medicaid is a government program that provides health insurance to low-income individuals. If you apply for Medicaid, the government will look at your assets to determine if you are eligible for benefits. A lady bird deed can help you to protect your assets from Medicaid, thereby increasing your chances of qualifying for benefits.

• Reduce the value of your countable assets
  

  When you create a lady bird deed, you are transferring ownership of the property to your joint owner. This reduces the value of your countable assets, which can make you more likely to qualify for Medicaid benefits.

• Protect your home from Medicaid estate recovery
  

  If you receive Medicaid benefits, the government may try to recover the cost of your care from your estate after you die. However, if you have transferred your home to a joint owner using a lady bird deed, the government cannot force the sale of your home to recover the cost of your care.

• Preserve your assets for your loved ones
  

  If you have a lady bird deed, your assets will pass to your joint owner after you die. This means that your loved ones will inherit your assets, instead of the government.

• Protect your privacy
  

  If you apply for Medicaid, the government will have access to your financial information. However, if you have transferred your assets to a joint owner using a lady bird deed, the government will not have access to this information.

However, it is important to note that using a lady bird deed for Medicaid planning purposes can be complex. It is important to speak to an attorney to make sure that you are using the deed properly and that you are meeting all of the Medicaid eligibility requirements.

Simple and inexpensive to create

One of the biggest advantages of using a lady bird deed is that it is simple and inexpensive to create. You can create a lady bird deed yourself using a simple form, or you can hire an attorney to help you. The cost of creating a lady bird deed is typically much lower than the cost of creating a revocable living trust.

To create a lady bird deed, you will need to provide the following information:

• The names of the grantor (the person transferring the property) and the grantee (the person receiving the property)
• A legal description of the property
• The value of the property
• The date of the transfer

Once you have gathered this information, you can create a lady bird deed using a simple form. You can find lady bird deed forms online or at your local courthouse. Once you have completed the form, you will need to sign it in front of a notary public.

After you have signed the deed, you will need to record it with the county clerk. The recording fee is typically a few dollars. Once the deed is recorded, it will become a public record.

Creating a lady bird deed is a relatively simple and inexpensive process. However, it is important to make sure that the deed is properly executed and recorded. If you have any questions about how to create a lady bird deed, you should speak to an attorney.

Here are some tips for creating a lady bird deed:

• Use a simple form. There are many different lady bird deed forms available online and at your local courthouse. Choose a form that is easy to understand and complete.
• Make sure that the deed is properly executed. The deed must be signed by the grantor and the grantee in front of a notary public.
• Record the deed with the county clerk. The recording fee is typically a few dollars. Once the deed is recorded, it will become a public record.

Must be recorded with the county clerk

Once you have created a lady bird deed, you must record it with the county clerk. This is important because recording the deed gives public notice of your ownership interest in the property. Without recording the deed, your ownership interest may not be protected against the claims of other parties, such as creditors or subsequent purchasers.

• Protects your ownership interest
  

  Recording the deed protects your ownership interest in the property against the claims of other parties, such as creditors or subsequent purchasers.

• Gives constructive notice of your ownership
  

  Recording the deed gives constructive notice of your ownership to the world. This means that anyone who searches the public records will be able to see that you are the owner of the property.

• Prevents others from claiming an interest in the property
  

  Recording the deed prevents others from claiming an interest in the property, even if they are unaware of your ownership.

• Makes the deed effective against third parties
  

  Recording the deed makes it effective against third parties, such as creditors or subsequent purchasers. This means that they cannot claim an interest in the property if they did not have actual or constructive notice of your ownership.

To record a lady bird deed, you will need to take the following steps:

• Obtain a certified copy of the deed from the notary public who notarized it.
• Take the certified copy of the deed to the county clerk's office in the county where the property is located.
• Pay the recording fee.

Once you have recorded the deed, it will become a public record. Anyone who searches the public records will be able to see that you are the owner of the property.

May have unintended consequences

While lady bird deeds can be a valuable estate planning tool, it is important to be aware of the potential unintended consequences before you create one. Some of the potential drawbacks of lady bird deeds include:

• Loss of control over the property
  

  Once you create a lady bird deed, you will give up your exclusive ownership of the property. This means that you will no longer be able to sell or transfer the property without the consent of your joint owner.

• Potential for disputes with your joint owner
  

  If you and your joint owner have different ideas about how to use or manage the property, this could lead to disputes. For example, if you want to sell the property but your joint owner does not, this could create a major conflict.

• Exposure to your joint owner's debts and liabilities
  

  If your joint owner has debts or liabilities, these debts and liabilities could become your responsibility if you create a lady bird deed. For example, if your joint owner is sued and loses, the court could order the sale of the property to satisfy the judgment.

• Difficulty in obtaining a mortgage
  

  If you need to get a mortgage on the property, it may be difficult to do so if you have a lady bird deed. This is because lenders are typically reluctant to lend money on property that is owned by two or more people.

It is important to weigh the potential benefits and drawbacks of a lady bird deed carefully before you decide whether to create one. If you are considering creating a lady bird deed, you should speak to an attorney to make sure that you understand the potential consequences.

FAQ

Here are some frequently asked questions about lady bird deeds in Florida:

Question 1: What is a lady bird deed?

Answer: A lady bird deed is a type of deed that allows you to transfer ownership of real estate while retaining a life estate. This means that you can continue to live in the property and enjoy all of the benefits of ownership, even though you have transferred legal ownership of the property to someone else.

Question 2: Who can create a lady bird deed?

Answer: Any Florida resident who is 18 years of age or older and of sound mind can create a lady bird deed.

Question 3: What are the benefits of creating a lady bird deed?

Answer: There are several benefits to creating a lady bird deed, including avoiding probate, reducing estate taxes, protecting your assets from creditors and lawsuits, and qualifying for Medicaid benefits.

Question 4: What are the drawbacks of creating a lady bird deed?

Answer: Some potential drawbacks of creating a lady bird deed include giving up your exclusive ownership of the property, the potential for disputes with your joint owner, exposure to your joint owner's debts and liabilities, and difficulty in obtaining a mortgage.

Question 5: How do I create a lady bird deed?

Answer: To create a lady bird deed, you will need to provide the following information: the names of the grantor (the person transferring the property) and the grantee (the person receiving the property), a legal description of the property, the value of the property, and the date of the transfer. You can create a lady bird deed yourself using a simple form, or you can hire an attorney to help you.

Question 6: Where do I record a lady bird deed?

Answer: You must record a lady bird deed with the county clerk in the county where the property is located. The recording fee is typically a few dollars.

Question 7: When should I speak to an attorney about creating a lady bird deed?

Answer: You should speak to an attorney about creating a lady bird deed if you have any questions about the process or if you have any concerns about the potential consequences of creating a lady bird deed.

Closing Paragraph for FAQ: If you are considering creating a lady bird deed, it is important to weigh the potential benefits and drawbacks carefully. You should also speak to an attorney to make sure that you understand the process and the potential consequences.

In addition to the information provided in the FAQ, here are a few additional tips for creating a lady bird deed in Florida:

Tips for Creating a Lady Bird Deed in Florida

Conclusion

Lady bird deeds can be a valuable estate planning tool for Florida residents. They can help you to avoid probate, reduce estate taxes, protect your assets from creditors and lawsuits, and qualify for Medicaid benefits. However, it is important to be aware of the potential drawbacks of lady bird deeds before you create one. You should speak to an attorney to make sure that you understand the process and the potential consequences.

If you are considering creating a lady bird deed, here are a few things to keep in mind:

• You will give up your exclusive ownership of the property.
• You may have disputes with your joint owner.
• You may be exposed to your joint owner's debts and liabilities.
• You may have difficulty obtaining a mortgage.

Despite these potential drawbacks, lady bird deeds can be a valuable estate planning tool for many Florida residents. If you are considering creating a lady bird deed, speak to an attorney to learn more about the process and the potential consequences.

A lady bird deed can be a great way to transfer ownership of your property to a loved one while retaining a life estate. However, it is important to understand the potential benefits and drawbacks of a lady bird deed before you create one. If you have any questions or concerns, you should speak to an attorney.