Lady Bird Deed vs Transfer on Death Deed: Florida Focus

When planning how your property will be passed down, it’s crucial to explore your options to avoid the probate process and make things easier for your loved ones. Two popular methods in Florida for handling real estate transfers are the Lady Bird Deed and the Transfer on Death (TOD) Deed. While both offer probate avoidance, there are important differences that might make one a better fit for your situation. Let’s break down these two options and highlight what makes each unique.

At the Law Office of Cameron H.P. White, P.A., we guide Floridians through estate planning decisions like these, ensuring they’re comfortable with the choices that best suit their needs.

What Is a Lady Bird Deed?

A Lady Bird Deed, also known as an Enhanced Life Estate Deed, allows you to transfer property upon your death while keeping full control over it during your lifetime. It’s a flexible tool that lets you continue to use, sell, or even mortgage the property without involving the named beneficiaries. The real benefit? It avoids probate, so when you pass, the property transfers automatically to your chosen beneficiaries without needing court approval.

The Lady Bird Deed can also protect the property from Medicaid estate recovery. If you’ve received Medicaid benefits during your life, the state may attempt to recover those costs from your estate. However, property transferred through a Lady Bird Deed may not be subject to these claims because it isn’t considered part of your estate at death.

Advantages of the Lady Bird Deed:

• Avoids probate: Property transfers directly to beneficiaries without court involvement.
• Control during lifetime: You retain full control over the property, including the ability to sell or change beneficiaries.
• Medicaid protection: This may shield property from Medicaid estate recovery.
• Agent under power of attorney can sign: Your designated agent can sign on your behalf.
• Option to include a warranty of title: You can offer a warranty that guarantees the property title is clear.

Drawbacks to Consider:

• • Lack of alternate beneficiary options: If the primary beneficiary passes away before you, the deed doesn’t automatically account for that scenario.

• Only partial to some states: It’s important to note that Lady Bird Deeds are specifically used in Florida and are not available in all states.

What Is a Transfer on Death (TOD) Deed?

A Transfer on Death Deed allows you to name one or more beneficiaries who will inherit your property after you pass. However, Florida does not currently recognize Transfer on Death Deeds. Hence, using the Lady Bird Deeds instead for similar purposes. It’s a simple, low-cost option to ensure the property doesn’t go through probate, and it only transfers ownership upon your death. Until then, you remain the sole owner of the property.

While the TOD Deed also avoids probate, it differs from the Lady Bird Deed in one key aspect: once you sign the TOD Deed and record it, changing the beneficiaries can be a bit more complicated. And unlike the Lady Bird Deed, you must personally sign the TOD Deed, and it must be recorded before your death to be valid.

Advantages of the TOD Deed:

• Simplicity: Straightforward and easy to set up.
• Avoids probate: Just like the Lady Bird Deed, the property passes to beneficiaries without court involvement.
• Cost-effective: Minimal cost to create and record.
• Alternate beneficiaries: You can name alternate beneficiaries to inherit if the primary beneficiary passes before you.

Potential Drawbacks:

• Beneficiary changes: Modifying beneficiaries may require revoking the deed and creating a new one.
• Creditor access: Creditors may still claim against the property after your death.
• Tax implications: Beneficiaries might face capital gains tax if the property has appreciated significantly.

Lady Bird Deeds vs TOD Deeds: Which One Is Right for You?

To make the decision a bit clearer, here’s a side-by-side look at the key differences between a Lady Bird Deed and a TOD Deed:

 

Feature	Lady Bird Deed	Transfer on Death Deed
Control during lifetime	Full control to sell, mortgage, or change beneficiaries	Full control but harder to change beneficiaries
Avoids probate	Yes	Yes
Beneficiary flexibility	Allows multiple beneficiaries	Allows for alternate beneficiaries
Medicaid protection	May protect property from Medicaid estate recovery	Not protected from Medicaid estate recovery
Creditor claims	Beneficiaries may face creditor claims	Beneficiaries may face creditor claims
Signing authority	Can be signed by an agent under a power of attorney	Must be signed by the owner
Recording requirements	Must be recorded when executed	Must be recorded before death
Title warranty	Can include a warranty of title	No warranty of title included

Which Deed Works Best for You?

Choosing between a Lady Bird Deed and a Transfer on Death Deed depends on your personal situation. If maintaining full control over the property during your lifetime is a priority, and you want the flexibility to make changes without re-recording a deed, a Lady Bird Deed may be the better choice.

On the other hand, if you prefer a simpler process with the ability to name alternate beneficiaries, a TOD Deed might be more suitable. TOD Deeds can be revoked or modified depending on which state you live in.

Both options are effective ways to avoid probate and ensure your property passes smoothly to your heirs. However, they come with different levels of flexibility, creditor protection, and administrative steps.

Make Informed Decisions with the Law Office of Cameron H.P. White, P.A.

Estate planning can feel overwhelming, but you don’t have to figure it out on your own. Our firm has extensive experience in helping Florida residents protect their assets and provide for their loved ones.

If you’re unsure which deed makes the most sense for your situation, reach out to the Law Office of Cameron H.P. White, P.A. for a free consultation. We’ll discuss your goals, explain your options, and create a personalized plan that ensures your property is transferred in the way that best suits your needs. Protecting your legacy doesn’t have to be complicated—let us help you make it simple. Call us today at (407) 792-6011 or contact us online to schedule your consultation. Your peace of mind is just a conversation away.