An Enhanced Life-Estate Deed is a type of deed used in estate planning which provides the grantor with certain rights during life, with the remaining interest to go to a named person at the grantor's death. In some states other than Florida, this type of deed is sometimes known as a "Lady Bird Deed."
Under the Enhanced Life-Estate Deed, the grantor reserves for and during grantor's lifetime, the exclusive possession, use and enjoyment of the property. The grantor retains the full unrestricted power and authority during grantor's lifetime, to sell, lease, convey, mortgage, or otherwise manage or dispose of the property, in fee simple, with or without consideration, and without joinder of the remainderman (the person who will receive the property after the grantor dies). During the time the grantor has possession and use of the property, the grantor is not liable for any waste (damages or depreciation) and if the property is sold, the proceeds are received by the grantor who can use them as he or she wishes. If the property has not been disposed of by grantor during his lifetime, then at the death of grantor, the remainder, if any, goes to designated grantee.
The Enhanced Life-Estate Deed may be used to pass along real property without going through probate but at the same time reserving to the grantor as many rights as possible. So, for example, if Grandma wants to leave her house to her two children without involving probate, she may use the Enhanced Life-Estate Deed. As grantor, she executes a deed naming the grantee as her children but reserving unto herself all rights relating to the property. While she's living, she can do what she wishes with the property--live in it, rent it, sell it, etc. At Grandma's death, the property goes to her children without probate. Usually all that has to be done at Grandma's death is to record her death certificate in the county where the property is located. Upon doing that, title to the property vests in the children.
While an Enhanced Life-Estate Deed is a useful estate planning tool, there are some draw-backs. These will be discussed in a subsequent blog entry. Using an Enhanced Life-Estate Deed should only be done with the advice of experienced legal counsel.