Understanding Florida Lady Bird Deeds: A Smart Estate Planning Tool
Timothy
C. Martin, Esq.
May
8, 2025
A Florida Lady Bird Deed, also known as an enhanced life estate deed, is a valuable estate planning tool that allows property owners to transfer real estate upon their death while retaining full control during their lifetime. This unique deed helps avoid probate, maintain Medicaid eligibility, and provide flexibility in property management. However, while Lady Bird Deeds offer substantial benefits, Florida residents must consider certain state-specific concerns to ensure they align with their estate planning goals.
How It Works
Unlike a traditional life estate deed, a Lady Bird Deed allows the grantor (property owner) to retain full ownership and control over the property, meaning they can sell, lease, or mortgage it at any time without needing beneficiary consent. This deed ensures a seamless transfer of property to designated beneficiaries upon the grantor’s passing, eliminating the need for probate proceedings. Additionally, it plays a crucial role in preserving Medicaid eligibility, preventing the state from reclaiming the property to cover long-term care costs.
Advantages of a Lady Bird Deed
One of the biggest advantages of a Lady Bird Deed is its cost-effectiveness, providing an efficient estate planning solution without requiring a trust. Because it avoids probate, heirs experience fewer legal fees and delays when inheriting the property. The deed also maintains homestead protections, allowing the property to retain tax benefits and shielding it from certain creditor claims. Another major benefit is flexibility—since the grantor maintains full control, they can change beneficiaries or revoke the deed whenever necessary.
Potential Drawbacks and Florida-Specific Concerns
Despite its benefits, a Lady Bird Deed has limitations. It applies only to real estate and does not extend to other assets, such as bank accounts or investments. Additionally, since not all states recognize this type of deed, complications may arise if the property owner moves to a jurisdiction where the deed holds no legal weight. Some title insurance companies may also require additional documentation before issuing a policy, which can add an extra step to the process.
Florida residents should be aware of certain legal and practical considerations when using a Lady Bird Deed:
- Legal Uncertainty – Florida courts have provided little guidance on certain aspects of Lady Bird Deeds, such as whether they can be revoked without selling the property or how they interact with homestead protections when the grantor has a spouse or minor children.
- Title Insurance & Mortgage Issues – Some title insurance companies and mortgage lenders may not be familiar with Lady Bird Deeds, which can complicate refinancing or selling the property. Property owners should verify with their title insurer and lender before executing the deed.
- Medicaid Eligibility Risks – While Lady Bird Deeds are often used to preserve Medicaid eligibility, changes in Medicaid regulations could impact their effectiveness. Misinterpretation of the rules could lead to unintended consequences, so consulting an attorney is recommended.
- Creditor & Tax Concerns – If a remainder beneficiary has outstanding debts, creditors may attempt to attach liens to their future interest in the property. Additionally, property tax reassessment could occur upon transfer, potentially increasing costs for beneficiaries.
- Limited Flexibility Compared to Trusts – While Lady Bird Deeds provide more control than traditional life estate deeds, they lack the flexibility of a revocable living trust, which allows for conditional transfers and asset protection across different asset types.
Lady Bird Deed vs. Other Estate Planning Options
A Lady Bird Deed offers unique benefits compared to other estate planning tools. Traditional Life Estate Deeds limit the grantor’s ability to sell or modify the property without beneficiary consent, whereas Lady Bird Deeds allow full control. Revocable Living Trusts provide broader estate planning benefits, including multi-asset management, privacy, and creditor protection, but require more effort and legal costs to set up. Transfer-on-Death (TOD) Deeds allow property to pass to beneficiaries without probate but do not allow the grantor to modify beneficiaries or sell the property without revoking the deed entirely. Each option has distinct advantages depending on the grantor’s priorities—whether it’s avoiding probate, retaining control, or managing multiple assets.
How to Create a Lady Bird Deed in Florida
To create a Lady Bird Deed in Florida, the grantor must draft the deed, ensuring it includes key details such as their name, the remainder beneficiaries, and a legal description of the property. The deed must then be signed before two witnesses and a notary to satisfy Florida’s legal requirements. Finally, the deed must be recorded with the county clerk’s office to ensure its enforceability.
Conclusion
For Florida residents focused on avoiding probate while maintaining full control over their property, a Lady Bird Deed is an excellent choice. However, potential complications related to title insurance, Medicaid eligibility, and creditor concerns must be carefully considered. Those with multiple assets requiring detailed management may find a revocable living trust more beneficial. If avoiding probate with minimal effort is the priority, a TOD deed is a viable alternative—though it lacks the flexibility of a Lady Bird Deed. Ultimately, selecting the best estate planning strategy depends on individual needs, financial considerations, and long-term objectives.
About the Author
Timothy C. Martin, Esq.,
is a Florida-based solo attorney focusing on estate planning, probate, business
organizations and contracts, real property, animal law, and LGBTQ+ advocacy.