An Enhanced Life Estate Deed: An Alternative to Probate
Enhanced Life Estate Deeds (also known as Lady Bird Deeds) have become increasingly popular in Florida. They are a handy tool in a lawyer’s estate planning toolbox to assist families who wish to avoid probate without the expense and complexity of creating revocable trusts.
An Enhanced Life Estate Deed has similarities to a traditional Life Estate Deed. They both give the right of a person during their remaining natural life to enjoy certain benefits of home ownership, such as the right to possession and any income generated by the property. Both deeds transfer a property title to one or more beneficiaries while avoiding the probate process, without having complex legal documents such as a trust. A vital aspect of both deed types is that they terminate instantly upon the holder’s (life tenant’s) death.
A Life Estate Example
A parent can execute a deed in which they retain a Life Estate for their home, conveying the property to a child or children after their death. With a Life Estate Deed, if that parent chooses to sell or mortgage the property, the beneficiaries must agree to that transaction voluntarily. A consequence to this type of deed is that the beneficiary’s interest is vested ownership. The parent, in effect, has given up sole control of the property.
The Benefits of a Lady Bird Deed versus a Life Estate
An Enhanced Life Estate Deed is an estate-planning instrument that takes this one-step further. In addition to avoiding probate so that no court administration is needed, the deed uses language in which the estate’s creator (the life tenant) reserves the right to change their mind without the approval of the beneficiaries. In other words, the original owner (life tenant) has the power and flexibility to retain complete control over the property and can sell, convey, lease, gift, mortgage, etc., without the approval of the beneficiaries. Those that will inherit the home have no rights to the property during the owner’s lifetime.
Plan for Your Future and Your Legacy
During every estate planning consultation at C.J. Hilliard Law, P.A., we consider whether an Enhanced Life Estate Deed benefits that particular client. Enhanced Life Estate Deeds have their limitations and carry certain risks. Therefore, they are only the best tool for some. The advantages of an Enhanced Life Estate Deed are that it avoids
probate, is low cost compared to a more complicated living trust, and is revocable if the property owner chooses to change their mind during their lifetime. In some instances, it allows a person to qualify for Medicaid and keep their homestead.
To further discuss estate planning and whether an Enhanced Life Estate Deed is right for you, contact our law firm at (407)656-1576. C.J. Hilliard Law, P.A., is located in Winter Garden, Florida, and we represent clients in Orlando and Central Florida. Call today to schedule an appointment. We are ready to protect you and your family.