Life Estate Deeds
A life estate deed is useful estate planning tool that helps minimize legal fees associated with probate and the conveyance of your real property after death. It is a viable, less expensive alternative to the more flexible living trust.
During probate in Florida the presiding judge is required to oversee and approve the sale of the deceased’s real property to protect the interests of the deceased’s beneficiaries. And if a judge is involved, you can bet that a probate attorney is probably needed to represent the estate’s interests as well. Life estate deeds side step the involvement of probate judges and attorneys by automatically conveying the deceased’s real property by operation of law to those designated in the life estate deed.
While all this may sound good, a problem arises with a typical or regular life estate deed when and if you need or want to access the equity in your property perhaps by taking out an home equity line of credit or a reverse by mortgage and you can't. Similarly if you need to sell your property because you need the money or want to move you can't. You can't because according to the law you don't own full title to the property.
An "enhanced" life estate deed, sometimes known as a “lady bird” deed, solves these problems by allowing you to retain full interest and powers to sell, convey, lease and / or mortgage your property just as if you held full title to the property and still name the person or persons to whom you want the property to be conveyed to upon your death.
An improperly drafted, executed and recorded enhanced life estate deed may be considered a conveyance and have severe unintended consequents. Of primary concern to most Florida homeowners a conveyance may trigger loss of your Save our Homes Tax Cap status and allow the property appraiser to recalculate the assessed value of your property and cause a sharp increase in property taxes. Or a conveyance may trigger the due on sale clauses in any outstanding mortgages or loans allowing the lender to demand full payment of the underlying note. It is important that you consult an attorney for assistance with the drafting of an enhanced life estate deed.
Please note that the following are general responses to questions and do not and should not be considered as the rendering of any legal advice, nor does it constitute an attorney client relationship. Because specific circumstances vary with each situation the observations provided here may not apply to you or your situation. If you need legal assistance, it is always best to speak directly to an attorney.
During probate in Florida the presiding judge is required to oversee and approve the sale of the deceased’s real property to protect the interests of the deceased’s beneficiaries. And if a judge is involved, you can bet that a probate attorney is probably needed to represent the estate’s interests as well. Life estate deeds side step the involvement of probate judges and attorneys by automatically conveying the deceased’s real property by operation of law to those designated in the life estate deed.
While all this may sound good, a problem arises with a typical or regular life estate deed when and if you need or want to access the equity in your property perhaps by taking out an home equity line of credit or a reverse by mortgage and you can't. Similarly if you need to sell your property because you need the money or want to move you can't. You can't because according to the law you don't own full title to the property.
An "enhanced" life estate deed, sometimes known as a “lady bird” deed, solves these problems by allowing you to retain full interest and powers to sell, convey, lease and / or mortgage your property just as if you held full title to the property and still name the person or persons to whom you want the property to be conveyed to upon your death.
An improperly drafted, executed and recorded enhanced life estate deed may be considered a conveyance and have severe unintended consequents. Of primary concern to most Florida homeowners a conveyance may trigger loss of your Save our Homes Tax Cap status and allow the property appraiser to recalculate the assessed value of your property and cause a sharp increase in property taxes. Or a conveyance may trigger the due on sale clauses in any outstanding mortgages or loans allowing the lender to demand full payment of the underlying note. It is important that you consult an attorney for assistance with the drafting of an enhanced life estate deed.
Please note that the following are general responses to questions and do not and should not be considered as the rendering of any legal advice, nor does it constitute an attorney client relationship. Because specific circumstances vary with each situation the observations provided here may not apply to you or your situation. If you need legal assistance, it is always best to speak directly to an attorney.
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