What Is A Florida Lady Bird Deed?
A Florida lady bird deed, also known as an enhanced life estate deed, is a legal instrument used in estate planning to convey real property while retaining control over it during the grantor’s lifetime.
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What Are The Advantages Of A Lady Bird Deed In Florida?
A Florida lady bird deed provides certain advantages that make it a popular choice for anybody seeking to streamline the transfer of real estate to their beneficiaries while maintaining a great degree of flexibility and control. Some of the advantages of an enhanced life estate deed include:
- Avoidance of probate: Upon the grantor’s death, the property automatically passes to the designated beneficiaries without passing through probate. This saves money and time for the heirs and offers less opportunity for challenges.
- Medicaid eligibility protection: The execution of a lady bird deed is not considered a gift or transfer of ownership for Florida Medicaid purposes. In combination with a grantor’s express intent to return to the property or the retention of the property by the grantor’s spouse, it may be possible to avoid issues with the five-year “look-back” period Medicaid can invoke before covering long-term care.
- Tax benefits: When the grantor passes away, the beneficiaries receive a step-up in the property’s tax basis to its fair market value at the time of death – but not before. That reduces their tax liability if they choose to sell. In the meantime, the grantor can maintain their homestead exemption for property taxes.
It should be noted that a Lady Bird Deed is not appropriate in all situations. Sometimes a revocable living trust is a better way to accomplish your estate planning goals (such as when leaving property to minor beneficiaries, beneficiaries with special needs, or when the need to build contingencies into your estate planning is desired). We review all of the options with our clients to help them make a decision that is best for their circumstances.
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Getting your estate plan in order is both a loving act toward your family and a way to protect your own interests. Call Feldman & Feldman at 954-228-6074 or use our online contact form to schedule your initial consultation with an estate planning lawyer.