Lady Bird Deeds Give You A Sense Of Security While Enabling You To Keep Your Options Open
What is the most beautiful bird in Florida? Is it the flamingo or the roseate spoonbill? The greater blue heron or the majestic anhinga? The snowy egret or the purple gallinule? When it comes to estate planning, the most beautiful bird is the lady bird deed, an elegant solution to the thorny situation of how to get your house to pass to your heirs outside of probate. A Clearwater estate planning lawyer can help you make a conflict-proof plan for passing your house and other valuable items of property on to your heirs.
Probate Is No Fun
If you have written a will, you have successfully expressed, in a legally enforceable way, your wish to distribute your assets in a way other than according to the laws of intestate succession. (According to the laws of intestate succession, the court awards your estate to your nearest living relatives.) Formalizing a will can give you a great sense of relief, because you know that you will be able to provide for your stepchildren, your nieces and nephews, your closest friends, or anyone else, but while it solves one problem, it creates another: your heirs will have to pay hefty taxes before they can inherit the assets you have designated for them.
Owning a house remains one of the strongest indicators of financial security, but it comes with a lot of expenses. When someone inherits a house, it significantly increases their tax burden. There are ways to transfer a house to a beneficiary without probate, but they are not exactly simple, either.
Neither Is Relinquishing Your Property While You Are Alive
Estate planning lawyers sometimes encourage people to gift property to beneficiaries while they are alive, but doing this with real estate property is a minefield for conflict. Besides the tax burden (the value of a house vastly exceeds the $15,000 annual gift tax exclusion), there is the issue that you still live in the house. It is hard to feel comfortable in your own home when it doesn’t belong to you, but to your children; it is easy to feel resentful and to interpret your children’s behavior as them waiting for you to die so that they can sell your house or rent it out.
A Lady Bird Deed Could Be the Solution
For some types of assets, such as bank accounts, you can specify a transfer on death provision, so that the account will belong to the beneficiary after you die and will not need to go through probate. Florida does not allow transfer on death provisions for real estate, except in the case of lady bird deeds. With a lady bird deed, you get enhanced life estate, which means that, not only can you stay in the house for the rest of your life, but you also have full decision-making power over it. That means that, even if you list a family member as a beneficiary on the lady bird deed, the beneficiary does not have a say in whether you sell the house; selling the house also invalidates the beneficiary’s claim to the property. Meanwhile, if you stay in the property for the rest of your life, the house will pass to the beneficiary upon your death.
Contact an Attorney Today for Help
An estate planning lawyer can help you protect your heirs from paying avoidable, excessive taxes on real estate. Contact William Rambaum for help today.