The Differences Between a Life Estate Deed and a Lady Bird Deed

When you create a Life Estate Deed, you as the property owner are signing a special Deed that gives another person ownership of your property as soon as you pass away. In the document, you’re designated as the life tenant. The person who will receive the property upon your death is the remainderman or remainder person. The document stipulates that it’s your property for life, but upon your death, it becomes the property of the remainder person.

In order to establish ownership of the property, the remainder person will need to do two things:

• Obtain a certified copy of the official death certificate (this is usually available a week or two after death) and bring it to the courthouse for recording.
• Pay the recording fee set by the clerk of courts.

The clerk will record this in the official county records and it serves as proof that the property now belongs to the remainder person.

Life Estate Deeds have a long history, stretching back hundreds of years to English Common Law. From those early times, the way that it worked was to lock the property, preventing a later transfer to a different person. Once a remainder person was added to a Life Estate Deed or any other type of property ownership, the life tenant would then need the written permission of the remainder person to make any changes going forward. This made creating a Life Estate Deed somewhat risky. The property immediately became the property of the remainder person upon the death of the life tenant, and no changes could be made in the meantime without the remainder person's permission.

If you changed your mind while still alive, revisions could not be made to the Deed without permission of the remainder person.

In recent years, the legal field has come up with another option called an Enhanced Life Estate Deed or a Lady Bird Deed. The Lady Bird deed gives the property owner more control over what they can do with their property once a remainder person has been named. Under a Lady Bird Deed, the owner doesn’t need to get the remainder person's consent to sell, transfer, or mortgage the property. In fact, while still living, the life tenant can change remainder persons anytime they desire, or even cancel the Lady Bird Deed entirely.

The owner doesn’t even need to let the remainder person know about their decision to do any of these things. They can just do whatever they would otherwise do with the property. 

Choosing the Lady Bird Deed option will help the owner save hundreds or thousands of dollars in attorney fees and probate costs. There are many different fees associated with Probate, so an option that allows property owners to avoid them is becoming a more and more popular choice.

The Requirements of a Lady Bird Deed

The requirements of a Lady Bird deed are simple. The owner just needs to choose the remainder person. It’s not necessary to notify the remainder person that they’re being added to the Deed if the owner doesn’t want to. It’s also permissible to add more than one remainder person – for example, all of the children in a family could be added as remainder people. It’s a fast and easy process.

There are no other requirements, but if the property has a mortgage, it’s a good idea for the property owner to check with their mortgage company first to make sure they have no restrictions. The owner should also need to let the property’s insurance company know that they’re making this change, though it shouldn’t really cause any problems for them.

A Lady Bird Deed can be used for other types of real property, not just houses. It can be used for a vacant lot or a mobile home (where the real estate is owned by the mobile home owner) as easily as a single-family home, for example. 

Having the Lady Bird Deed drafted and recorded by an attorney will ensure that you and your heirs will save the maximum amount possible on costs and fees and receive as much value as you can for your property. However, you will have to pay the costs of having an attorney draft and record the Deed. But this cost should be far less than what you and your family stand to lose without the Deed being in place.

Lady Bird Deed Language

The language used in a Lady Bird Deed isn’t too difficult to understand. The owner, referred to as the grantor, transfers the property named in the Deed to himself or herself for life. The person named to receive the property upon death is the remainderman or the remainder person.

The document states that it reserves the rights of the grantor to use the property in all ways through the remainder of their life. It also reserves the grantor’s right to cancel, modify, or amend the Deed unilaterally. The ability to make these changes without the permission or knowledge of the remainder person is what differentiates a Lady Bird Deed from a basic Life Estate Deed. Otherwise, the language is similar to what can be found in other Real Estate Deeds.

Lady Bird Deeds in Florida

Lady Bird Deeds are recognized in the state of Florida. In order to be recognized, the deed needs to have two witnesses and be signed by the grantor – the person whose property is being deeded. The document must also be notarized in order to be properly executed.

Conclusion

There are key differences between a Life Estate Deed versus a Lady Bird Deed (a/k/a Enhanced Life Estate Deed), all of which can be addressed by a qualified attorney. They will advise you on the most effective ways to protect your assets and avoid unnecessary costs and fees.

"The information provided herein is simply a brief overview of the Florida law on this particular matter. It should not be relied upon for legal purposes, as the facts and circumstances to any specific legal matter may vary substantially from the limited explanation and application of often complicated legal rules and principles that may be addressed herein, or applicable in your particular legal matter. You should only rely upon legal advice provided to you by a licensed attorney who has had an opportunity to fully evaluate your particular legal matter".