Florida Lady Bird Deed

How a Florida Lady Bird deed works

Formally called an enhanced life estate deed, a Lady Bird deed lets a Florida homeowner name who inherits the house automatically at death while keeping every ownership right during life. The owner can sell it, mortgage it, refinance it, lease it or change the named beneficiary without anyone's signature. When the owner dies, title passes straight to the beneficiary without probate. An ordinary life estate deed is different: there, the remainder beneficiary usually has to join any sale or mortgage.

Florida has never adopted a transfer-on-death deed statute for real estate, which is why the Lady Bird deed became the state's main tool for passing a home outside of probate. Only five states use it regularly: Florida, Michigan, Texas, Vermont and West Virginia.

How Florida Medicaid treats it: the Department of Children and Families (DCF) addresses this directly. Its ESS Policy Manual (§ 1640.0613.01) says that if a person keeps a life estate through a Lady Bird deed or a life estate with powers, no transfer has occurred, because the person keeps full ownership powers and the property transfers only at death. Recording one doesn't start a 60-month look-back penalty. An ordinary life estate deed, by contrast, is treated as a transfer of the remainder interest, valued with DCF's life estate table.

How it connects to estate recovery: Florida's Medicaid estate recovery claim is filed in the recipient's probate estate (Fla. Stat. § 409.9101). A home that passes by Lady Bird deed at death doesn't go through probate. A Florida homestead may already be protected from creditors, but the deed avoids probate either way.

The homestead caution: Florida's Constitution restricts how a homestead can be left when the owner is survived by a spouse or a minor child (Article X, Section 4(c)). A Lady Bird deed on homestead property should be drafted with those rules in mind, especially for married owners. That's a reason to have a Florida attorney prepare it instead of using a generic form.

Example

Ellen, 74, a widow in Cape Coral, records a Lady Bird deed naming her two daughters. She keeps living in the house and later refinances it without their signatures. At 80 she needs nursing home care and applies for Medicaid. Because the deed isn't treated as a transfer, it causes no look-back penalty. When she dies, the house passes to her daughters outside probate.

Illustrative example; names and figures are hypothetical.

Common mistakes

• Using an ordinary life estate deed by mistake. It counts as a transfer for Medicaid, and you lose the right to sell without the beneficiaries.
• Using an out-of-state transfer-on-death deed form. Florida has no TOD deed statute for real estate.
• Ignoring homestead devise restrictions when the owner is married or has a minor child.
• Never recording the deed. It must be properly signed, witnessed and recorded with the county.

Questions and answers

Does a Lady Bird deed trigger the Medicaid look-back in Florida?

No. Florida DCF's ESS Policy Manual says that when a person keeps a life estate through a Lady Bird deed, no transfer has occurred.

Can I sell my house after signing a Lady Bird deed?

Yes. You keep the power to sell, mortgage, lease or change the beneficiaries without their consent.

Does a Lady Bird deed protect a Florida home from Medicaid estate recovery?

Florida files its estate recovery claim in the probate estate. A home passing by Lady Bird deed goes to the beneficiary outside probate.

Is a Lady Bird deed the same as a transfer-on-death deed?

They work similarly, but Florida has no transfer-on-death deed statute for real estate. The Lady Bird (enhanced life estate) deed is the Florida tool.