Ladybird Deed Benefits
In recent years a new form of transferring real estate has been gaining popularity in Florida. The “enhanced life estate deed,” or “Ladybird Deed” (according to legend, former President Johnson once used this type of deed to transfer some property to his wife, Ladybird Johnson) is an attractive way to avoid the probate process when transferring real estate to your children or other beneficiaries after you die.Here is why this type of transaction works so well in Estate Planning in Florida. In the hope of making things simple and avoiding probate, many senior citizens quitclaim their property to their children or add their children’s name to their deeds. There are potential problems with this way of avoiding probate. For example, if your child’s name is on your deed, then his or her creditors could obtain an enforceable lien against the property because the child cannot claim the home as homestead. (In Florida, the homestead, or primary residence, is exempt from creditors’ claims). Further, if your child is married, his or her spouse can claim an interest in the property in the event of divorce. And what if you want to sell the property? Your child would have a say in this decision!
The benefits of the Ladybird Deed are numerous. You remain the owner of the property and can change the deed or sell your property without the permission of your child. The property is not subject to the claims of your child’s creditors or the claims of a divorcing spouse. At your death, the property passes to your child automatically, without probate expenses or delays. Further, in my Elder Law practice, an added bonus for those who are concerned with long-term nursing home costs, is that this type of transfer does not affect Medicaid eligibility.
The time is right for this type of transfer on death deed. Folks are familiar with payable on death arrangements for bank accounts, life insurance, and retirement accounts. For real estate, transfer on death deeds have the same benefits.
If you are interested in including a Ladybird Deed in your estate planning, contact the Law Office of Debra G. Simms for a consultation. A deed can be prepared inexpensively and avoids the costs and delays of probate.
