A lady bird deed (called an enhanced life estate deed in Florida) is a relatively new form of deed that—like a traditional life estate deed—allows property to pass automatically to one or more designated recipients at death, without the need for probate. Florida is one of only a handful of states (including Texas) that recognize lady bird deeds.
How a Lady Bird Deed Works
Lady bird deeds are used to avoid probate. Here’s how it works:
- You sign a deed transferring your real estate to a person or group of people (called the remaindermen or remainder beneficiaries) at your death, but retaining the right to sell, use, and otherwise deal with the property during your lifetime.
- If you decide to sell, mortgage, or otherwise deal with the property during your lifetime, you are able to do so without the consent of the remaindermen (this is the difference between a life estate deed and a lady bird deed).
- Upon your death, your remainder beneficiaries simply file your death certificate in the land records. This serves as proof of yours death and allows the property to be transferred to the remaindermen without the need for probate.
Note: The issue of whether or not a deed is a lady bird deed is independent from warranties of title being conveyed. In other words, a lady bird deed could be a quitclaim deed, warranty deed, or special warranty deed.
Advantages of Lady Bird Deeds over Traditional Life Estate Deeds
Once a traditional life estate deed is signed, the grantor cannot sell, mortgage, convey, gift, or otherwise terminate the remainder interest during his or her lifetime without the consent of the remainder beneficiaries. In other words, the current owner can’t change his or her mind without involving the future owners. Lady bird deeds are intended to avoid this problem.
Like a traditional life estate deed, a lady bird deed allows you to name someone to receive the property at your death while reserving the right to use the property during your lifetime. But unlike a traditional life estate deed, you are able to deal with the property during your lifetime, without the consent of the remainder beneficiaries.
Lady bird deeds can allow you to:
- Keep complete control of the property during your lifetime without requiring consent of the remainder beneficiaries;
- Retain the right to use, profit from, or sell the property during your lifetime;
- Avoid triggering the Federal gift tax on the transfer during your lifetime; and
- Avoid probate of the property at your death.
Application of Florida Documentary Stamp Tax
The Florida documentary stamp tax applies to transfers of real estate by deed. The Florida Department of Revenue does not assess a full documentary stamp tax if the person who transfers the property is the same person that retains the life interest. Instead, the deed is only assessed a minimum documentary stamp tax at the time that the property is first conveyed. If the property is not sold by the date of the grantor’s death, it becomes subject to full documentary stamp taxes at that time.
Special Considerations When Using Florida Lady Bird Deeds
Some title insurance companies will not insure lady bird deeds when those deeds are used to exclude a child from inheriting the property while giving the property to his or her siblings. This could create title issues in the future. If an enhanced life estate deed is being used to transfer property to children, it is good practice to include all children on the deed.
To be effective, Florida lady bird deeds must meet all of the requirements of Florida law. Otherwise, the deed will not achieve your goals of transferring the property without probate. The deeds created by our Deed Generator are designed to satisfy all legal requirements for validity and recording. They are effective in all Florida counties.