Top 5 Reasons to Have a Lady Bird Deed – Especially If You Live in Florida

I have much respect for a Lady Bird Deed, also known as an enhanced life estate deed, as one of the most powerful estate-planning tools available to Florida homeowners and a few select states. Those other states which allow Lady Bird Deeds are Michigan, Texas, Vermont, and West Virginia. It seems many people do not know the value of a Lady Bird deed, which can provide significant benefits for avoiding probate, long-term care planning, Medicaid protection, probate avoidance, and inheritance planning. These are great benefits one receives with a Lady Bird Deed, often without the complexity or expense of a Trust. Below are the top five reasons to consider adding a Lady Bird deed to your estate plan.

A Lady Bird deed gives you complete control over your property during your lifetime. During your lifetime, you retain power to sell the property, refinance it, take out a mortgage, change your beneficiaries, or cancel the deed entirely without needing permission from the remainder beneficiaries. A Lady Bird deed has more general appeal than an ordinary life estate deed, which limits your authority to change the deed once the remainder interest is granted.

A Lady Bird deed ensures a home passes smoothly to the named beneficiaries in the deed, without going through probate. Upon death, the property automatically transfers to the individuals you named as remainder beneficiaries.
This means there is no court involvement, no waiting period, no legal fees associated with probate, and no public record of estate administration. For modest estates, avoiding probate is a major objective, and provides financial and emotional relief.

Florida is one of the few states where Medicaid recovery is limited to assets that pass-through probate estates. A Lady Bird deed transfers the home outside of the probate court process. This is the reason real property is not subject to Medicaid estate recovery after your death.
This means you may qualify for Medicaid long-term care benefits, such as nursing home care, while keeping your home. Your home can ultimately pass to your heirs, and the state cannot force a sale of the home in probate court to recover Medicaid costs.

A Lady Bird deed does not trigger the five-year Medicaid look-back period because the grantor, the property owner, retains full control over the property during life. This type of deed is a fully Medicaid-compliant deed in Florida and in the other states that recognize it. As stated earlier, there are few other estate-planning tools which allow this level of flexibility and protection against Medicaid recovery.

Some people stress over deciding whether they need a Trust or a Lady Bird Deed. Not every homeowner needs a revocable trust or a complex estate plan. Sometimes a Lady Bird deed is all that is needed, because its straight to the point, effective, and relatively inexpensive to create. A Lady Bird deed can be used in place of a revocable trust when the main goal is to avoid probate court.
Before creating a Lady Bird deed, it is important to consult with an experienced estate planning attorney to ensure proper drafting, and that all your objectives are met.