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A Lady Bird Deed is most beneficial for simple estates with simple property ownership and is a viable choice to transfer property in Florida while avoiding probate. There are many financial and tax-related benefits to a Lady Bird Deed. There are no tax consequences, and it avoids the Federal Gift Tax.
It's generally not advisable to do this without legal expertise. The preparation of a Lady Bird deed requires a precise understanding of Florida property law and estate planning law.
Disadvantages of Lady Bird Deeds Therefore, a Lady Bird deed cannot be used to create a remainder interest in third parties without the consent and involvement of the life interest holder's spouse and children. (2) Title insurers are often skeptical to insure Lady Bird deeds in certain situations.
A ladybird deed must have the following: A correct legal description of the property. A statement of the consideration is provided if there is any. The name of the grantor. The name(s) of the beneficiary(ies) (if multiple owners are on title, a specification as to how the co-owners will hold title is required).
Lady bird deeds have no impact on your taxable estate, meaning you can get the full step-up in basis at death. Simply put, if you use a lady bird deed, all capital gains on the deeded property are eliminated on the day you die.