A Florida homeowner can have a valid Will leaving the house to an only child, and that house still goes to probate. Tom Moss sees families discover this after a parent dies, usually at the worst possible moment. Florida law sends assets titled in a decedent’s name through court unless a beneficiary designation, remainder interest, or trust says otherwise. A Will doesn’t count.
What a Lady Bird Deed Does
The legal name is an enhanced life estate deed. The owner transfers the property back to themselves for life and names a remainderman, much like a beneficiary on a life insurance policy. During their lifetime, the owner can sell, rent, mortgage, or give away the property without anyone’s signature. A traditional life estate requires the remaindermen’s consent for all of that.
At death, the family records a short form death certificate in the county records, and the beneficiaries own the property. No new deed, no court.
Strong drafting language matters here. Some title companies ask remaindermen to sign off on a sale, and a well-drafted deed lets the owner reconvey the property without them.
What Stays Protected
Florida homestead creditor protection survives the deed, both during the owner’s life and after death. So do the property tax benefits, including the $50,000 homestead exemption and the 3% annual cap on increases. The deed triggers no gift tax, and beneficiaries still receive a full step-up in basis. If Mom bought the house for $100,000 and it’s worth $500,000 when she dies, her children can sell it at that value and owe no capital gains tax.
Medicaid estate recovery can’t touch a homestead left to family members. A rental property is a different story, since it carries no homestead exemption.
The Shortcut That Backfires
Many parents add a child to the title with rights of survivorship. It avoids probate, but it also counts as a gift. The child loses much of the step-up in basis, and the gift can affect Medicaid eligibility. A lady bird deed avoids probate without either cost.
When a Trust Makes More Sense
Tom uses lady bird deeds constantly, and he steers clients away from them based on who inherits. Two siblings who can’t get along become equal co-owners, which can end in a partition lawsuit. A child on disability benefits could lose eligibility by inheriting a house. A child with an addiction or a spendthrift spouse could lose the house entirely. A recorded deed is also public, so a sibling left out will know right away. A trust stays confidential.
Many of Tom’s clients use both. The lady bird deed names their revocable trust as the remainderman, so the house stays in their name for life and lands in a protective trust at death.
Getting the Details Right
A Florida deed needs two witnesses and a notary. Missing either one voids it. Online forms often list a street address instead of a legal description, which can cause problems of its own. Recording matters too. Florida treats a deed as valid once it’s signed and delivered, but an unrecorded deed leaves the beneficiary exposed if the owner later deeds the property to someone else. The deed also covers only Florida property, so a North Carolina vacation home follows North Carolina law.
The cost difference is stark. Probate on a homestead starts around $5,000. A properly drafted lady bird deed runs about $500, and for the right family, few estate planning tools in Florida do more for less.
If you want to learn more about Life, Legacy & Wealth, check out https://sawyerandsawyerpa.com/podcast/
