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What purpose does a lady bird deed serve?

On Behalf of | May 14, 2024 | Estate Planning |

People putting together estate plans may use a variety of different documents to address their assets and protect their families. Most people focus their efforts on their highest-value assets first. Typically, people worry about what may happen to their homes when they die.

For many people, the home where they live is their most valuable possession. They need to carefully address their residence in their estate plan for the protection of their loved ones. Often, people list their homes among their assets in their wills or use their real estate holdings to help fund a trust.

Other people might add deeds to their estate plans to arrange for the transfer of real property after they die. Florida is one of the few states that allow people to use lady bird deeds to address real property holdings.

A lady bird deed creates a life estate

Some people refer to a lady bird deed as an enhanced life estate deed. What it essentially does is give one party an interest in real property until they die. Then, ownership of that property passes to beneficiaries chosen by the person drafting the lady bird deed.

Lady bird deeds are beneficial because they can ensure the smooth transfer of real estate without forcing the property to first pass through probate court. They can reduce confusion about someone’s intentions regarding their largest asset, the home where they live. They can give someone certainty regarding their estate plan while also protecting their ability to live in or control the property before they die.

Unlike certain other estate planning solutions, lady bird deeds do not necessarily protect the home from Medicaid estate recovery efforts and other challenges. An individual considering a lady bird deed may need to explore their options thoroughly to validate the idea that a lady bird deed is the best solution given their circumstances.

Those with sizable personal holdings often need more creative solutions for addressing their assets in their estate plans. Adding a lady bird deed to a comprehensive estate plan is one of several viable ways to address real property owned by those engaged in planning.


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