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By: Roberto Vazquez

A Guide to the Florida Lady Bird Deed

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Avoiding Probate Can Offer Relief For Our Loved Ones

Avoiding probate is on everyone’s list when they are planning an estate. The probate process can be time-consuming and expensive for our loved ones, leaving them with less than we intended when planning for life after we are gone.

Some tactics are available to ensure the probate process is as streamlined as possible for those you leave behind. One of those tactics is to utilize the Lady Bird Deed approach in Florida. This article will discuss more details surrounding this option and help you to decide if it’s best for you and your family.

What is the Lady Bird Deed?

You are not alone if you have never heard of the Lady Bird Deed. The Lady Bird Deed also called the enhanced life estate deed, can offer peace of mind to property owners. So how does it work? The Lady Bird Deed originated in the 1980s and was created by a Florida lawyer.

The Lady Bird Deed is an excellent resource in that it allows a property owner to give the property to another without losing the rights to the property until their death. This allows the current owner to make changes or upgrades to the property while they are still living rather than losing their rights to the property, which can happen when using other resources in estate planning.

Primary Benefits of The Lady Bird Deed

What makes this resource such a great option? Namely, the property owner maintains their rights while alive, as discussed above. They can maintain, change, profit from the property, and choose to sell it at any time.

Once the property owner passes away, the property is transferred to the beneficiary, avoiding most or all of the probate process. This option can save the beneficiary time, hassle, and costs associated with the probate process.

The owner can also avoid paying a gift or estate tax on this property by utilizing the Lady Bird Deed, which appeals to many.

The costs associated with a Lady Bird Deed are typically less than costs for other resources such as a living trust. Securing the Lady Bird Deed can also be less intrusive or complex for those who prefer a more straightforward approach to their estate planning.

What About Medicaid Eligibility?

Another very appealing characteristic is that should the property owner seek benefits such as Medicaid later in life, utilizing the Lady Bird Deed removes the value of the said property from the eligibility equation. What makes this especially important is that Florida follows a “look-back” period when it comes to qualifying for Medicaid.

This means those seeking eligibility will be subject to looking back five years to their assets to ensure they weren’t transferring them specifically to be eligible for Medicaid. With the Lady Bird Deed, the value of the property is exempt.

Are There Disadvantages To The Lady Bird Deed?

There are some disadvantages to this resource that you must consider. One of them is that utilizing the Lady Bird Deed doesn’t protect that property from creditors. If you owe debt and creditors choose to place a lien on the property to satisfy a debt, they are not stopped, as the property is still in your name until your death.

Further changes to your estate plan may require additional steps as changes arise should you choose to use the Lady Bird Deed. Your estate planning attorney can discuss these extra steps with you and streamline the process as much as possible.

Should the beneficiary of the property pass away before the current owner does, it can become unclear who owns that asset. Plan for this with your estate planning attorney and discuss whether or not you can create a contingent beneficiary to avoid this.

What If I Need to Make Changes?

The property owner can revoke the Lady Bird Deed at any time. If something pops up and they no longer wish for the beneficiary to have access to their asset upon their death, they can simply revoke the original deed.

It is also important to note that should the property owner choose to change the beneficiary at any point; they can typically do so by creating a new Lady Bird Deed naming the new beneficiary, which can nullify the original deed.

This flexibility appeals to many, as you are not “stuck” when you create the Lady Bird Deed, and you can make changes as necessary when life changes.

Where Do I Start?

If you are overwhelmed by the estate planning process, don’t be. It doesn’t need to be complex and challenging. In fact, with a streamlined approach, you can save yourself and your loved one’s challenges and questions in the future.

We take pride in the aggressive advocacy that we provide our clients. We have your best interest at heart, which is the bottom line. You have worked your entire life to provide for your family and yourself. Let us help you protect that legacy and ensure your loved ones can rest easy while they transition to the new chapter of life after you leave.

With some simple strategies, we can work together to seek the best resources for you and put them in place so you can relax and enjoy the fruits of your labor.

Contact our office at (407) 904-9166 to get started. We take the time to sit down with our clients and learn about their wishes and needs. We formulate a custom strategy that encompasses all their dreams and provides thoughtful care for their loved ones. We look forward to helping you and your family.