The Pros & Cons of Ladybird Deeds

deed contract

Many of my clients’ main concerns is to avoid probate.  One option to do this in Florida, other than a revocable living trust, is an Enhanced Life Estate Deed, also known as a Lady Bird Deed. There are advantages and disadvantages of using this type of deed, which I will discuss below.

When you own property, you may execute a deed retaining the right to the property during your lifetime, with the right for someone else to receive the property after you die. The right to have the property during your lifetime is called a life estate. The right to receive the property after you die is referred to as a remainder interest.

Pro’s:  Unlike a traditional “life estate deed”, which places restrictions on a person’s ability to “undo” the deed, a Lady Bird Deed adds language which:

  • allows the parent to revoke the deed and sell the property to another person without the consent of the child.
  • does not trigger a penalty period for Medicaid. 
  • avoids probate.

Con’s:  However, note that

  • some title companies or lenders require the children to sign the deed or mortgage.
  • Any judgment against the child can be considered a lien on the parent’s property.
  • If the parent changes his or her mind and wants to add or remove a child, the consent of the existing children is still required by many title companies.
  • If one of the children dies, his or her share may still need to be probated.

While the advantages mostly outweigh the disadvantages, it is important to understand the pros and cons of using an Enhanced Life Estate Deed/Lady Bird Deed and discuss your options with a qualified estate planning attorney.

Call or email us today to set up your complimentary estate planning consultation to review your options.

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