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Florida Enhanced Life Estate DeedFlorida Enhanced Life Estate Deed

What is a Florida Enhanced Life Estate Deed and How Does it Work?

24 Apr 2020

Informally known as “Ladybird” deed, the Florida Enhanced Life Estate Deed is one of the best estate planning documents available in the State, as it has several valuable benefits. Simply put, the purpose of this document is to transfer real estate outside of probate to a beneficiary named in the deed. Read on to learn how it works.

 

The Florida Enhanced Life Estate Deed

 

Under standard life estate deeds, you can give real property to beneficiaries, referred to as “remaindermen,” but cannot mortgage or sell the property during your lifetime without the permission of those remaindermen, who will then be parties to the mortgage or sale if they grant their permission. In other words, under this type of deed, you give both your property and control of it away during your lifetime.

 

Under an enhanced life estate deed, however, you continue to control your property during for as long as you live and are able to mortgage or sell the property without having to get your beneficiaries’ permission. Unlike standard-life-estate-deed beneficiaries, the beneficiaries named in an enhanced life estate deed do not get the property immediately upon the deed’s execution. Instead, the property is transferred upon the death of the deed’s creator.

 

The Benefits of the Florida Enhanced Life Estate Deed

 

In addition to maintaining control, a person who establishes an enhanced life estate deed can benefit in several other ways.

 

One of the biggest advantages that come with this type of deed is that, since you retain control over the property, executing the deed will not count as a property transfer for Medicaid eligibility purposes, which is not always the case with other types of beneficiary deeds. In other words, you can set up a legal method for your beneficiaries to take control of your property after you pass away without running the risk of damaging your ability to qualify for Medicaid. Additionally, this estate-planning tool allows you to transfer the property to your beneficiaries immediately upon your death, bypassing the costly and time-consuming Florida probate process.

 

The Traditional Life Estate Deed – Common Problems

 

Traditional life estate deeds in Florida have a few problems. For instance, if the remainderman dies before the creator of the deed, then the property has to go through probate. Another problem that comes with traditional life estate deeds is that the deed’s creator loses a substantial amount of power, as he or she can no longer mortgage or sell the property, as mentioned above, or make any other decisions regarding the property without the remainderman’s consent.

With an enhanced life estate deed, the property must still go through the Florida probate process if the remainderman dies before the deed’s creator. However, you can deal with this issue in the deed. A reliable enhanced life estate deed drafted by a professional can anticipate this possibility and deal with the potential problem.

 

The Florida Life Enhanced Estate Deed is Not Always the Best Option

 

Although transferring property through a Florida enhanced life estate deed comes with many benefits, in certain situations, it may not be the best move. One example is a case where there is a large mortgage on the property, which can make the tax stamps on the deed exorbitantly expensive. Thus, before rushing into creating an enhanced life estate deed, you should consult with a Florida Estate Planning Lawyer. They can review your situation to determine if this estate-planning tool is the best one for your specific needs and circumstances.

 

A Poorly Drafted Florida Enhanced Life Estate Deed Can Be Dangerous

 

Although most enhanced life estate deeds can avoid the Florida probate process altogether, some cannot because they do not meet the requirements of some insurance companies. Failing to meet such requirements is a common problem we see with many online deeds that fail to deal with contingencies appropriately. Hiring a professional to draft the deed is critical.

 

Another dangerous consequence of having a poorly drafted enhanced life estate deed is that it may expose protected assets to creditors. If you already have an enhanced life estate deed, it is crucial to have an experienced Florida Estate Planning Lawyer review the document. The sooner, the better, as your deed may be exposing the property to creditor claims.

 

Do you have any questions? Call Marina Title at (305) 901-5628 or send us an email to Romy@MarinaTitle.com today.

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