Transfer Real Estate Without Probate With a Lady Bird Deed

Transfer Real Estate Without Probate With a Lady Bird Deed

A Florida Enhanced Life Estate Deed — also known as the “Lady Bird Deed” because President Lyndon Johnson used one to pass property to his wife, Lady Bird Johnson – is an estate planning instrument that allows a property owner to maintain control of his or her real property and avoid probate when it is time to pass the property on to heirs.

A Florida Enhanced Life Estate Deed can be used to transfer property to beneficiaries without probate. This is how it works:

• The property owner signs a deed that transfers the property to one or more people (called remainder beneficiaries or remaindermen) upon his or her death, but retaining the right for the owner to control the use of the property during his or her lifetime.
• If the owner wants to sell or mortgage the property, he or she may do so without the consent of the remaindermen.
• Upon the owner’s death, the beneficiary simply needs to file a certificate of death in the county where the property is located, and it is transferred without the need for probate.

By executing a Lady Bird deed, the current owner of the property retains all rights until his or her death. The owner can sell the property without permission of the beneficiaries, and any of the beneficiary’s creditors that might seek to attach liens to the property cannot do so until the owner dies and the property passes to the beneficiaries.

A Lady Bird deed also allows a property owner to make a gift of the property without incurring any federal gift tax. In addition, if the property is sold shortly after the owner’s death, there is no capital gains tax. The transfer should not affect homestead tax exemption either.

The owner can also change his or her mind about the beneficiary named in the Lady Bird deed. The beneficiary designation can be changed without the need for the beneficiary’s consent.

It is important to consult with a knowledgeable Florida real estate attorney to draft a Lady Bird deed to ensure the property doesn’t end up back in your estate (if, for example, the beneficiary you named dies before you do) and complies with current Florida law.

Jurado & Farshchian, P.L. assists individuals with a variety of Florida real estate and estate planning matters. Please call one of our experienced real estate and estate planning attorneys at (305) 921-0440, or email us at info@jflawfirm.com today.

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