What Is a Lady Bird Deed in Florida and How Does It Work?

A Lady Bird deed, formally known as an enhanced life estate deed, is a powerful estate planning tool recognized in Florida that allows property owners to transfer real estate to beneficiaries at death without going through probate. Unlike many other transfer methods, it lets you retain complete control over your property during your lifetime.

How a Lady Bird Deed Works

A traditional life estate deed splits property ownership into two parts: the life estate (the right to use and occupy the property during your lifetime) and the remainder interest (ownership that passes to the named beneficiaries after your death). However, a traditional life estate deed is irrevocable once signed, meaning you cannot sell, mortgage, or otherwise dispose of the property without the consent of the remainder beneficiaries.

A Lady Bird deed adds a critical enhancement. It reserves the right of the life estate holder to sell, mortgage, lease, or otherwise dispose of the property without needing the permission of the remainder beneficiaries. This retained power is what makes the deed "enhanced" and gives you far more flexibility than a standard life estate.

Key Benefits of a Lady Bird Deed

Avoids Probate: When you pass away, the property automatically transfers to the named remainder beneficiaries by operation of law. There is no need to open a probate case for the property.

Preserves Homestead Exemption: Because you retain full control and the right to live in the property, your Florida homestead exemption—including the Save Our Homes cap on assessed value—remains intact.

Retains Full Control: You can continue to live in the home, rent it out, sell it, refinance it, or even revoke the deed entirely. The remainder beneficiaries have no say in how you use the property during your lifetime.

No Gift Tax Consequences: Because you retain the power to revoke the transfer, the IRS does not treat the deed as a completed gift. There are no gift tax implications when you sign the deed.

Stepped-Up Tax Basis: The remainder beneficiaries receive a stepped-up tax basis at the time of your death, which can significantly reduce capital gains taxes if they later sell the property.

Medicaid Planning Benefits: In Florida, a Lady Bird deed can help protect the homestead from Medicaid estate recovery after your death because the property passes outside of probate and is not part of the probate estate that Medicaid can claim against.

Lady Bird Deed vs. Regular Life Estate Deed

The distinction between a Lady Bird deed and a regular life estate deed is critical:

• Regular life estate: Once signed, you cannot sell or mortgage the property without the remainder beneficiaries' consent. The transfer is complete and irrevocable.
• Lady Bird deed: You retain full authority over the property. You can change your mind, sell the property, or name different beneficiaries at any time.

  This flexibility makes the Lady Bird deed far more practical for most Florida homeowners.

  When Should You Consider a Lady Bird Deed?

  A Lady Bird deed may be appropriate if you:

  • Own your primary residence in Florida and want to avoid probate for that property
  • Want to preserve your homestead exemption and Save Our Homes cap
  • Do not want to create a trust but still want probate avoidance for real estate
  • Are engaged in Medicaid planning and want to protect the home from estate recovery
  • Want a simple, cost-effective alternative to transferring property through a trust

    Limitations to Be Aware Of

    A Lady Bird deed is not the right solution for every situation. It does not protect against creditors during your lifetime, and it only covers the specific property named in the deed. If you own multiple properties or have a complex estate, a revocable living trust may provide more comprehensive protection.

    Additionally, Lady Bird deeds must comply with Florida's homestead restrictions. If you are married, your spouse's rights must be properly addressed, and the deed must be drafted carefully to avoid unintended consequences.

    Working with an Attorney

    A Lady Bird deed must be properly drafted and recorded to be effective. Errors in the deed language—particularly the enhanced life estate powers—can result in a deed that functions as a regular life estate or an outright transfer. An experienced Florida estate planning attorney can ensure the deed is drafted correctly and fits within your broader estate plan.

    Contact our office to discuss whether a Lady Bird deed is right for your situation.