What Is a Florida Lady Bird Deed and How Does It Work?

What is a Florida Lady Bird Deed?

A lady bird deed in Florida is a type of enhanced life estate deed allowing property owners to retain control during their lifetime while naming beneficiaries to inherit the property upon their death. It bypasses probate, protects Medicaid eligibility, and enables the owner to sell or change beneficiaries without the beneficiaries’ consent.

Requirements for Lady Bird Deeds

For a Lady Bird deed to be valid in Florida, it must include the following:

1. Grantor – The current property owner must sign the deed before two witnesses and a notary.
2. Enhanced Life Estate – The grantor must keep control over the property during their lifetime.
3. Remainder Beneficiary – The deed must name beneficiaries who inherit the property upon the grantor’s death.
4. Legal Description – A formal legal description of the property must be included (not the postal address).
5. Homestead Provision – For homestead properties, the deed must confirm the property remains the owner’s homestead.

2025 Update

Going into 2025, there have been no significant changes to Florida laws regarding lady bird deeds. These deeds, also known as enhanced life estate deeds, continue to be a popular estate planning tool in Florida, allowing property owners to transfer home to beneficiaries upon death without probate. They also allow owners to retain control over their property during their lifetime, including the ability to sell or mortgage the property without the beneficiaries’ consent.

There has not been any proposed legislation in Florida to change lady bird deeds for 2025 and beyond.

Steps to Getting a Lady Bird Deed in Florida

1. Research the full legal description of the property.
2. Draft the deed with a reserved enhanced life estate.
3. Sign the deed in the presence of two witnesses.
4. Record the deed in the county records.

The person receiving the property after death does not need to sign the deed.

Advantages of Florida Lady Bird Deeds

1. A lady bird deed avoids probate.

Florida lady bird deeds allow property owners to transfer on death to named beneficiaries automatically without going through the probate court system.

2. Lady bird deeds are less expensive and more effective than living trusts.

In Florida, a lady bird deed is a simpler and less expensive way to transfer property upon death than a living trust. If your primary concern is transferring your home without probate, a lady bird deed is usually a better idea than a revocable trust.

3. A lady bird deed is simple to set up.

A Florida lady bird deed can be set up in about one week. All you need to do is (1) get the legal description from the prior deed, (2) draft the new deed with the designated beneficiaries and enhanced life estate language, and then (3) record the deed in the county records.

4. A lady bird deed can be changed.

With a Florida lady bird deed, the property owner is allowed to change their mind at any point during their lifetime. The property owner can enter into a new deed that gives the remainder interest to someone else or that cancels the lady bird deed entirely.

5. A lady bird deed provides tax benefits.

With a lady bird deed, the beneficiaries get a step up in basis in the property. That means they do not pay taxes on the increase in value of the property that occurred during the owner’s lifetime.

Disadvantages of a Lady Bird Deed in Florida

The main disadvantage of a Lady Bird deed in Florida is its limited protection against creditors during the owner’s lifetime. Additionally, title insurance or financing may be more challenging to secure. It also requires careful planning to avoid unintended Medicaid consequences or disputes among beneficiaries.

Enhanced Life Estate Deeds

An enhanced life estate deed, often called a lady bird deed, is a legal tool that allows property owners to transfer real estate to a beneficiary while keeping full control over the property during their lifetime. Unlike a traditional life estate deed, the owner can sell, mortgage, or revoke the deed without the beneficiary’s permission.

Upon the owner’s death, the property passes automatically to the beneficiary, bypassing probate. If the property is a homestead, the deed must include a provision to maintain its homestead exemption.

Florida lady bird deeds are also called transfer-on-death deeds because the property transfers to a beneficiary upon the death of the owner.

Can a Lady Bird Deed Be Changed?

A lady bird deed is revocable and can be changed at any time. The property owner can deed the property back to themselves or transfer the property to a third party, which effectively cancels out the lady bird deed and divests the remainderman of their interest.

Homestead Exemption with a Lady Bird Deed

A lady bird deed allows you to keep your homestead exemption in Florida. The property owner has homestead rights after executing a lady bird deed as long as they keep living in the property.

When the property qualifies as a homestead, it will remain exempt from creditors and will get a homestead tax exemption.

Lady Bird Deeds vs. Quitclaim Deeds

Unlike a lady bird deed, a quitclaim deed transfers full ownership from the grantor to the grantee immediately upon signing.

In contrast, a lady bird deed keeps full ownership with the grantor during their lifetime and only transfers the property to the designated beneficiaries, known as remaindermen, upon the grantor’s death.

Using a Lady Bird Deed for Medicaid Planning

A lady bird deed can be a useful tool in Florida for people who qualify for Medicaid and who are concerned that the government will be able to take non-homestead properties after their death.

In Florida, a person’s homestead is protected from creditors with very few exceptions. Medicaid cannot look to the homestead for collection.

However, Medicaid can collect from non-homestead properties the amounts paid for care during the owner’s lifetime. Medicaid can assert a claim against assets in a person’s probate estate. A lady bird deed transfers property after death outside probate so the property is not part of the decedent’s probate estate upon death. In this way, non-homestead properties are kept out of the probate estate and are protected from collection by medical claims or any other creditors after the property owner’s death.

Using a Ladybird Deed to Avoid Probate

A Florida lady bird deed avoids probate by transferring property directly to the beneficiary (remainderman) upon the owner’s death. The property passes automatically outside the probate estate by operation of law, saving time and costs.

Probate is a court-supervised process to settle a deceased person’s estate, including paying debts and distributing assets. Florida requires attorney involvement for formal probate, making it an expensive and lengthy process for families. A Lady Bird deed bypasses probate, ensuring a smoother and more efficient transfer of property.

Tax Implications for Lady Bird Deeds

Transferring property by lady bird deed does not trigger a gift tax. The transfer is not a completed gift during the lifetime of the property owner.

In addition, the beneficiary of the lady bird deed should still enjoy a step-up basis in the property. A stepped-up basis means that if the property is eventually sold by the beneficiary, the beneficiary will pay income tax only on the appreciation in value from the date when the original property owner died.

What Happens to a Lady Bird Deed with a Civil Judgment?

There are different considerations for lady bird deeds if a money judgment has been issued against either the current owner or the designated remainder beneficiaries.

Judgment Against Current Owner

A lady bird deed does not protect an owner’s real property from creditors, other than a homestead, if there is a recorded civil judgment against the owner. A judgment becomes an automatic lien on all real property owned by the judgment debtor in any county in which the judgment is recorded, with the exception of homestead property.

A judgment lien would automatically attach to any non-homestead property that the debtor has conveyed in a lady bird deed. The judgment lienholder could foreclose the lien on the property.

Judgment Against Remainderman

A civil judgment against a named remainderman of a lady bird deed does not affect the owner’s interest in the property during the owner’s lifetime. This is true because the remainderman’s interest in the property does not vest until the owner’s death. Therefore, there is no legal interest to which the judgment can attach as long as the owner lives. Even if there is a judgment against a remainderman of a lady bird deed, the current owner retains full control over the property and is not affected by the judgment.

Tax liens are different. An IRS lien against a remainderman attaches to the property once the remainderman is named on the lady bird deed.

Getting Insurance with a Lady Bird Deed

Most major title insurance companies fully understand lady bird deeds and are not concerned about insuring the title of a property subject to a lady bird deed. Title companies should not require the signature or consent of the people listed as remaindermen (designated beneficiaries) when the enhanced life estate owner sells the property because the beneficiaries have no vested property interest.

Some smaller or less experienced title insurance companies may not understand a lady bird deed, and these companies may require the remaindermen to sign a release. Even worse, the companies may require any judgment holders against the remaindermen to release any claim of lien against the properties. These requirements stem from a lack of understanding about how lady bird deeds work.

Property insurance is typically acquired in the grantor’s personal name prior to executing a lady bird deed.

Lady Bird Deed FAQs

Below are answers to some common questions about lady bird deeds in Florida.