What are Enhanced Life Estate Deeds?
Florida is one of three states (along with Texas and Michigan) that recognizes enhanced life estate deeds, also referred to as “Lady Bird” deeds. The purpose of these estate planning tools is to transfer real estate outside of probate to a beneficiary named in the deed.
Under a standard life estate deed, the owner of the real estate property gives that property to beneficiaries (referred to as “remaindermen”). The owner cannot sell or mortgage the property during his or her lifetime without the permission of those remaindermen, who will then be parties to the sale or mortgage if they grant their permission. This allows for the owner to effectively give the property and control of it away during his or her lifetime.
Under an enhanced life estate deed, however, the owner of the real estate (referred to as the “life tenant”) continues to control the property during his or her life. The owner then is able to sell or mortgage the estate without having to get consent from the beneficiaries named in the deed, as they have not yet been given the property.
Why is this type of life estate deed beneficial?
Beyond just maintaining control over the property during one’s life, a person who establishes an enhanced life estate deed can benefit in several other ways.
One big advantage is that since you retain control over the property, it does not count as a property transfer for Medicaid eligibility purposes. This is not always the case with other types of beneficiary deeds. Therefore, you can still set up a method for beneficiaries to take control of your property without potentially damaging your ability to qualify for Medicaid.
In addition, the deed allows you to easily transfer the property to your chosen beneficiaries immediately after your death, bypassing the probate process.
To learn more about enhanced life estate deeds, work with an experienced Tampa estate planning attorney at BaumannKangas Estate Law.