People spend a lifetime accumulating their assets, and most often have very specific wishes about how they would like their estate to be distributed upon their death. There are legal designations that determine how the process of the distribution of the estate proceeds. A qualified attorney can help ensure that your final wishes are captured in legal documents, such as a beneficiary deed, and that your heirs or beneficiaries will receive the assets you leave them without having to go through probate.

DOES THE STATE OF FLORIDA HAVE BENEFICIARY DEEDS?

Yes. Florida uses TOD (Transfer-on-Death) and POD (Payable-on-Death) designations which allows the beneficiary (or beneficiaries) to automatically receive the specified asset upon the death of the current owner. TOD designations are often used to transfer the funds in an IRA or brokerage account to a beneficiary. POD designations are generally used for bank accounts and stocks. One of the benefits of TOD and POD designations is that the beneficiary (or beneficiaries) do not have any right to the funds until the death of the owner.

However, in the State of Florida, TOD and POD designations cannot be used to transfer real estate or property. Instead, Florida recognizes enhanced life estate deeds, also known as Lady Bird deeds to transfer property to one or more beneficiaries. This designation works similarly to TOD and POD designations, but is used strictly for real estate.

WHAT EXACTLY IS A LADY BIRD DEED?

Only five states currently allow Lady Bird Deeds, and Florida is one of them. The other states are Texas, Michigan, Vermont, and West Virginia.

By using a Lady Bird deed, a person transfers all properties and real estate to himself until death. This creates what is called a life estate in the owner. A Lady Bird or beneficiary deed further allows the owner to designate beneficiaries who will receive his property upon his death.

One of the key provisions of a Lady Bird deed is that it allows the original owner to retain all the rights of ownership while he is still alive, without having to get consent from the named beneficiaries. This is what makes the Lady Bird deed an enhanced life estate. In a traditional life estate, the owner shares control of the property with the beneficiaries for the rest of his life. By terms of an enhanced life estate, or Lady Bird deed, the owner does not share control of the property with the beneficiaries. The owner retains full and complete control of the property. The owner can change his mind at any time, leave his property to someone else, gift it to someone, mortgage the property, or sell the property – all without having to involve the beneficiaries at all.

ADVANTAGES TO USING A LADY BIRD DEED

There are several benefits to using a Lady Bird or beneficiary deed:

  • The original owner retains control of the property throughout his lifetime. A Lady Bird deed is one of only two kinds of deeds in which the owner has control of the property throughout his lifetime.
  • The property is automatically transferred to the beneficiaries upon the owner's death and is not considered part of the probate estate – thus, the property is not considered an asset that must be probated.
  • Property covered by Lady Bird deeds do not impact a person's Medicaid long-term nursing care eligibility. A Lady Bird deed's transfer of assets is not subject to a Medicaid look-back penalty period.  
  • There is no gift tax payable upon the transfer of the property at the owner's death.
  • There are certain Federal tax advantages and state property tax planning advantages.
  • In Florida, by using a Lady Bird or beneficiary deed, your home retains the Homestead exemption which generally results in lower tax assessments. In addition, the home will remain out of the reach of creditors.
  • Although a living trust will accomplish the same goals as a Lady Bird deed, the Lady Bird deed is easier and less expensive to file, and can be done without using an attorney.

DISADVANTAGES OF A LADY BIRD DEED

  • If the beneficiaries of the property die before the owner of the property, it is unclear what will happen to the property upon the owner's death. The owner would be well advised to formally change the beneficiaries if they predecease him.
  • Change of beneficiaries in the Lady Bird deed requires additional paperwork.
  • If there are multiple beneficiaries and they do not get along, this can create a problem down the line. In order for the property to be sold or otherwise disposed of, the beneficiaries will all have to agree.
  • If the original owner of the house was in a long-term facility and Medicaid-eligible, the estate will need to pay back to Medicaid after the owner passes away.
  • If you plan to apply for a mortgage on the property, some title insurance companies may not issue title insurance if the property is subject to a Lady Bird deed.

Estate planning is extremely important to ensure that your assets are distributed the way you want them to be, minimize or eliminate the tax burden for your heirs or beneficiaries, and ensure that your assets are not eaten up by Medicaid in the event you need long-term health care in a facility.

Consultant with an Experienced Florida Estate Planning Attorney Today 

Setting up a beneficiary deed can be complicated. Working with an experienced estate planning attorney is a worthwhile decision when determining what you need to set up for your future. For further guidance, consult with an experienced estate planning attorney today.



Schedule A
Consultation Today

We care. We listen. We can help.
No matter what you need assistance with, don’t wait - schedule a consultation today to discuss a plan for your future.
(305) 614-7379
FAQ

Frequently Asked Questions

What is the purpose of a beneficiary deed?
A beneficiary deed allows a property owner to designate a beneficiary in the event of their death. With a beneficiary deed, this designated person does not have any ownership of the property until the current owner passes away.
Is a beneficiary deed a good idea?
The use of a beneficiary deed depends on your particular financial situation and what your goals are for your estate. An experienced estate planning attorney will be able to best advise you on whether or not a beneficiary deed is a good idea for you specifically.
Does beneficiary deed avoid probate?
A beneficiary deed does not guarantee that probate will be avoided, but it is an excellent way to help make sure it is far less of a possibility.

Jason Neufeld is the author of the

Florida Medicaid Planning Book

How to Get Medicaid to Pay for Some or All of Your Long-Term Care Expenses:

Without having to wait 5 years | without having to sell your house | without have to go broke first! (a Florida Medicaid Lawyer's Guide For Non-Lawyers)

GET THE BOOK
AMY DOW IS THE CO-AUTHOR OF THE PUBLICATION

Did You Know? Non-Attorney Medicaid Planners Cannot Give Legal Advice

Why you should hire an Elder Law Attorney?

GET THE PUBLICATION
TESTIMONIALS

What People Say About Us

"Jason and his team are responsive and communicate very well. Jason helped me to get the benefits that I qualified for much faster than expected. I would recommend him highly. My case seemed complicated to me, but Jason explained everything in detail and made everything go quite smoothly. I interviewed several elderlaw attorneys prior to choosing Jason Neufeld."

"Quick turn around time for appointments, great response time, very thorough, never rushed through and soooo easy to do business with over the internet! Read the website info, very very helpful!"

“The attorney Jason and his team are amazing at planning and execution. Me and my family would not trust anyone else with our estate planning needs.”

“I've been very impressed! A friend referred me and I've experienced nothing but perfect service and professionalism. I am extremely grateful!”

“A strong recommendation for Jason Neufeld and his Elder Law firm - very professional, patient, reliable, and experienced. When my father fell terminally ill, I became responsible for his assets and finances overnight, including the daunting task to qualify him for Medicaid. I interviewed several elder law firms but was most impressed by Jason’s client approach and practices. Throughout the process, Jason and his team provided clear guidance and support to successfully complete all the new and complex tasks required as a POA, and more importantly he enabled us to quickly achieve our goals related to Medicaid and estate planning. His fees are more than reasonable for the level of due diligence and support we received.”

Serving Elder Law Clients in the Following Areas

Miami, North Miami Beach, North Miami, Miami Beach, Miami Gardens, Aventura, South Miami, Kendall

Hallandale Beach, Miramar, Hollywood, Dania Beach, Ft. Lauderdale, Plantation, Davie, Pembroke Pines

Boca Raton, Jupiter, Hillsboro Beach, Deerfield Beach, Delray Beach, Boynton Beach.

Tampa, Brandon, Sarasota, Oldsmar, New Port Ritchie, Valrico, Bloomingdale, Temple Terrace
FIND A LAWYER NEAR YOU
Contact Us

Let's Talk

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form