A Lady Bird Deed is recognized by Common Law in only three states: Florida, Michigan and Texas. The Florida lawyer who created this deed named it after the 36th United States' President Lyndon B. Johnson’s wife, Lady Bird Johnson.
With a Lady Bird Deed, the owner of the property, referred to as the “Life Tenant,” retains complete control over the property during his or her lifetime.
The Life Tenant has the right to mortgage or sell the property without the consent of the beneficiaries/remaindermen named in the Deed because the property does not actually transfer until the death of the Life Tenant.
Upon the passing of the Life Tenant, the beneficiaries will file the death certificate in the public records, which is all that is needed in order for title to pass to them.
Avoid Probate: The subject property of the Lady Bird Deed passes from the Life Tenant to the beneficiaries/remaindermen without the need for probate.
Additionally,once the Lady Bird Deed is signed and recorded in the public records, there is no need for any other instrument or document to transfer the property to the beneficiaries/remainderman.
Tax Savings: With a Lady Bird Deed, federal tax law treats the property as though it was held until death. Thus, it can quality for a stepped-up basis that eliminates any appreciation that accrued in the property, thus saving in income tax.
Reduced Legal Fees – Unlike a living trust, which has similar benefits, a Lady Bird Deed tends to be much cheaper to prepare while more effective in many respects.
Keep the Homestead Exemption – Since the Lady Bird Deed does not transfer the property until death, its execution does not impact any current exemption – thus, the asset protection benefits of Florida homestead laws remain.
A Life Estate Deed, also known as a Beneficiary Deed or Transfer on Death (TOD) Deed, allows for the automatic transfer of property to one or more persons, called remaindermen, upon death.
The Life Estate Deed creates what is known as a “life estate,” in which the property owner continues to possess and use the property as a “Life Tenant” for their lifetime.
The benefits of a Life Estate Deed are the same as the aforementioned benefits of a Lady Bird Deed. However, there is one major exception: once a Life Estate Deed is executed, the Life Tenant only has the right to live on the property – the Life Tenant cannot mortgage, lease, rent, or sell the property without the consent of the remaindermen.
A Lady Bird Deed is the best option for someone who wants to convey Florida property to their heirs, while simultaneously retaining control of the property during his or her lifetime. Venustas Law has a Flat-Fee Rate of $325 for Lady Bird Deeds and other Real Estate Deeds.
If you think a Lady Bird Deed is right for you or you are interested in learning more, please click the link below and fill out the Contact Us form, or you may email us at info@VenustasLaw.com or call us at (786) 396-9929.