Snowbirds who own property in more than one state are sometimes surprised to learn that their heirs could be forced through probate in every state where their property is located. This causes unnecessary work and expense to loved ones who are already grieving. Fortunately, if you are a snowbird who owns a home in Florida, there is a simple estate planning tool that can help you avoid this outcome.
The Lady Bird Deed
Florida is one of few states that allow property to transfer outside of probate through the use of a Lady Bird Deed (also called an Enhanced Life Estate Deed). A Lady Bird Deed allows you to decide who will receive title to your Florida home after you pass, while still retaining the property for your use while you are alive. The best part? You also retain the right to change your mind.
For example, Jim owns a home in Collier County, Florida and wants to make sure that his nephew, Bob, receives the house when Jim dies. Jim is known as the “grantor” and Bob is known as the “grantee.” Jim decides to execute a Lady Bird Deed that keeps the house for Jim’s use while he is alive, but grants it to Bob after Jim’s death. Bob is considered the “remainderman” because he will receive the remainder of the property after Jim’s interest has expired.
Jim changes his mind and decides he’d like his Florida home to pass to his niece, Mary. A typical Life Estate Deed would require Bob’s consent (as the original remainderman) before Jim could change the deed and give the remainder interest to Mary. With a Lady Bird Deed, Jim does not need Bob’s permission. Jim can revoke his prior Lady Bird Deed and execute a new one, naming Mary. When Jim dies, Mary simply has to record Jim’s death certificate in the public records of Collier County and the house is hers.
Lady Bird Deeds Are Not for Everyone
The use of a Lady Bird Deed is not the best solution for everyone. There are a few drawbacks to discuss with your estate planning attorney:
- If your Florida house is your homestead and you have a spouse or minor children, you cannot use a Lady Bird Deed to give your house to anyone else;
- If you use a Lady Bird Deed to give your house to multiple remaindermen (in Jim’s case, leaving the house to both Bob and Mary), any future decisions about the property have to be made jointly… even if Bob and Mary don’t get along; and
- Lady Bird Deeds do not provide the same flexibility as a trust. If Jim wants Bob to receive the house, but wants to designate Mary to receive the house in the event that Bob dies before Jim, this cannot be done through a Lady Bird Deed. Transfers that take into account a variety of possible circumstances may be better served through a trust.
An effective estate plan can save your family unnecessary grief (and work) when you pass away. If you’re a snowbird and own property in Florida, talk with your estate planning attorney about your options. A Lady Bird Deed may be one of them.