Florida is one of only a handful of states that recognize Lady Bird deeds, an estate planning tool designed to enable property owners to transfer their property to others upon death, without sacrificing control over the property during life and while simultaneously bypassing probate. This type of deed got its nickname when President Lyndon Johnson used it to convey property to his wife, Lady Bird Johnson. Here’s how it works:
- The current owner signs a deed transferring his Florida property to himself for life, with the remainder to pass to another person or group of people (remaindermen or remainder beneficiaries) at death.
- The interest retained by the original owner, called a life estate, is paired with powers that give the owner ongoing control over his property. In other words, he can sell, use, or otherwise deal with the property during his lifetime without having to get permission from the remainder beneficiaries. This one characteristic distinguishes a Lady Bird deed from a life estate deed.
- Upon the death of the original property owner, and assuming he made no changes, the property passes automatically to the remainder beneficiaries, without the need for going through the often-costly probate process.
Lady Bird deeds have many features that make them excellent estate planning tools for Florida property owners, however there are underlying nuances pertaining to asset protection that should be considered. While there are websites that offer instruction and the forms necessary to create a Lady Bird deed on your own, it’s best to pay a qualified attorney in order to ensure all of your estate planning objectives are being met.
– Written by Melinda Stewart, Realtor, SRES