Lady Bird Deeds
Andrew David Easler, Esq.
Published
Updated
What Are the Advantages and Disadvantages of Lady Bird Deeds?
Pros: it can avoid probate, keeps the owner in control, and beneficiaries generally get a stepped-up basis. Cons: it covers only real estate, homestead limits may apply, and drafting errors invite challenges.
Lady Bird deeds, also known as enhanced life estate deeds, let an owner name who receives real estate at death while keeping the right to use and control it for life. Here are the main advantages and disadvantages.
Advantages:
Probate planning: a lady bird deed can help the property pass without probate, which can be slow and costly.
Control: the owner can sell or mortgage the property without the beneficiaries' consent.
Flexibility: the owner can change or revoke the deed at any time.
Gift tax: signing a lady bird deed is generally treated as an incomplete gift, so no gift tax return is usually required.
Tax basis: beneficiaries generally receive a stepped-up basis at the owner's death.
Disadvantages:
Medicaid: under current Florida Medicaid rules, signing a lady bird deed does not start the five year look-back period, but selling the home while receiving Medicaid can affect eligibility.
Real estate only: other assets need separate planning.
Homestead limits: a married owner or an owner with a minor child may be restricted in who can receive a homestead.
Errors: a deed that is not properly drafted or signed can be challenged, which is slow and costly.
Schedule a consultation with a QuickDeeds attorney to review whether a lady bird deed fits.
Disclaimer: This content is for informational purposes only and is not legal advice. No warranties on completeness, accuracy, or suitability. Always consult an attorney for personal guidance.
Related Lady Bird Deeds FAQs
- What Are the Risks of DIY Lady Bird Deeds for Owners and Heirs?
- What Is a Florida Lady Bird Deed?
- What Is an Enhanced Life Estate Deed?
- What Is Florida's Lady Bird Deed Law?
- What Is the Purpose of a Lady Bird Deed?
- What States Allow Lady Bird Deeds?
- Which States Recognize Lady Bird Deeds?
- Why Do They Call It a Lady Bird Deed?