How Does a Lady Bird Deed Affect Homestead Exemption in Florida?

A Lady Bird Deed (enhanced life estate deed) in Florida does not negatively affect the homestead exemption, which provides property tax reductions and protects the home from certain creditors. The property owner retains ownership and control during their lifetime, ensuring continued eligibility for the homestead exemption as long as the property remains their primary residence.

Homestead Exemption Benefits Retained

1. Continued Eligibility: The property owner retains ownership and control over the property during their lifetime, which means they continue to qualify for the homestead exemption. The exemption can still be claimed as long as the property remains the owner's primary residence.

2. Tax Exemptions and Protections: The homestead exemption provides significant benefits, such as reductions in property taxes and protection from forced sale by creditors. A Lady Bird Deed does not alter these benefits as long as the property owner maintains their residency and eligibility requirements.

Filing Deadline

1. Initial Application: The initial application for the homestead exemption must be filed by March 1 of the year following the purchase of the home or establishment of residency. For example, if you purchase ahome or establish residency in 2024, you must file for the exemption by March 1, 2025.

Eligibility Requirements

2. Primary Residence: The property must be the owner's primary residence as of January 1 of the year for which the exemption is being claimed.

3. Proof of Residency: The owner must provide proof of residency, such as a Florida driver's license, vehicle registration, voter registration card, or other documentation showing residency at the property address.

For more inforamtion on eligibility contact a local county recorder office.

Renewal and Notification

4. Annual Renewal: Once the homestead exemption is granted, it is automatically renewed each year as long as the property remains the primary residence of the owner. However, any changes in ownership or use must be reported to the county property appraiser.

5. Updating Records: If the property owner passes away or there is a change in ownership, the new owner or beneficiary must notify the county property appraiser’s office promptly, usually within 30 days, to update the records and potentially reapply for the homestead exemption under their name.

Transfer Upon Death

Upon the owner's death, the Lady Bird Deed automatically transfers ownership to the named beneficiaries without probate. The homestead status and tax benefits can continue for the beneficiaries if they meet the eligibility criteria. It's importnat to notify the county property appraiser's office promptly—typically within 30 days of the owner's death—to update the homestead status. Failure to do so may result in the loss of the exemption.

3. Quick Transfer: Upon the property owner's death, the Lady Bird Deed automatically transfers ownership to the named beneficiaries without going through probate. The homestead status and associated tax benefits can continue for the beneficiaries if they meet the eligibility criteria.

4. Assessment Limitation: The property’s assessed value will not be reset upon the owner's death, preventing a substantial increase in property taxes for the beneficiaries, provided they also qualify for the homestead exemption.

Drafting and executing a Lady Bird Deed in Florida requires meeting legal requirements to retain homestead exemption benefits during the owner's lifetime and ensuring a smooth transfer to beneficiaries. Consulting with an attorney helps ensure the deed is correctly prepared and recorded.