A Lady Bird Deed, also known as an Enhanced Life Estate Deed, is a unique legal tool used in estate planning. This type of deed allows property owners to retain control over their property during their lifetime while designating beneficiaries to inherit the property upon their death. Named after Lady Bird Johnson, the wife of former U.S. President Lyndon B. Johnson, this deed is particularly popular in Florida due to its flexibility and benefits, but Texas, Michigan, Vermont and West Virginia also recognize them.
5 common benefits of Lady Bird Deeds
Lady Bird Deeds are particularly beneficial for those looking to avoid probate, protect their property from Medicaid recovery, and minimize tax implications. The benefits include:
- Avoids probate: By avoiding probate, these deeds save time and legal costs because the property transfers directly to the beneficiaries.
- Retains control: Unlike traditional life estate deeds, the grantor maintains complete control over the property during their lifetime. This means they can sell, mortgage or change beneficiaries without anyone’s consent.
- Medicaid planning: Lady Bird Deeds generally protect property from Medicaid estate recovery, which means the state cannot claim the property to recover Medicaid expenses after the grantor’s death.
- Tax benefits: The deed helps maintain homestead tax exemptions and can provide help with capital gains taxes after the grantor’s death.
- Creditor protection: Since the property is not part of the probate estate, the deed protects the property from creditors’ claims after the grantor’s death.
These deeds can also address other needs specific to the client.
Setting up a Lady Bird Deed with an attorney
Setting up a Lady Bird Deed involves several steps. Those interested can consult a lifetime care attorney familiar with Lady Bird Deeds and Florida law. They will provide guidance and ensure the deed addresses the client and beneficiaries’ specific situation. Contact the firm today to see if a Lady Bird Deed is right for you.