Lady Bird Deeds Explained

Attorney Jason Neufeld discusses Florida Lady Bird Deeds and how they can benefit your family.
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Transcript:
In this video we're going to talk about ladybird deeds. These are also referred to as enhanced life estate deeds. So ladybird deed, and enhanced life estate deed are two different terms that mean the exact same thing. These are tools that are used in both an estate planning context and the Medicaid planning context. Let's discuss why…
So for estate planning purposes, ladybird deeds are a really useful way of indicating to the world who you want to receive your real estate, whether it's your homestead or whether it's non homesteaded property, in the state of Florida. Not every state recognizes ladybird deeds, but if your real estate is in Florida, ladybird deeds are a very useful estate planning tool because it says who gets your property after you pass away. Essentially, a ladybird deed is it's a real deed that you sign, it says, if your name is John Smith, it says, I, John Smith, deed this property to myself. After I pass away, I want my property to go to my children X, Y, and Z. But before I pass away, I retain the right to do whatever I want with that property, I can rent it out, I can sell it, I can change the remainderman. If my children X, Y, and Z are there, Z is a child that I no longer want to receive this real estate, I can in the future, exclude Z from receiving that property. So essentially, it's still my property, I can do whatever I want with it, I don't have to ask anyone else's permission to do anything with that property. But as long as I don't make any of those changes, after I pass away, X, Y, and Z will inherit.
This is very useful for estate planning, because when you record this deed in the public record, it now prevents X, Y and Z your kids from having to open up a probate to dispose of the real estate. All they need to literally do is take your death certificate, record it in the public record, and whoever is listed as essentially the pay on death beneficiary of your real estate is now the owner of the real estate.
So that's good, solid, estate planning, and probate avoidance and everybody likes that. It's also really important for Medicaid planning. Because what some people are tempted to do, especially with parents with their children, is say, you know, because I want my child to inherit this property, I'm going to put them on the deed right now, as a co-owner. For estate planning purposes, that's fine. But for Medicaid planning purposes, it's a big problem. It's a problem because you are essentially gifting an asset, a portion of your asset away. You're giving someone an ownership interest and an asset without receiving any money in return, and Medicaid considers that a gift. So if you do that, within five years of applying for Medicaid, Medicaid will count it as a gift. And we don't want to do that, right?
If you think you might be interested in Medicaid paying for a portion of your home health care, ALF bill, skilled nursing facility or any of these long term care expenses; You don't want to put anyone on your property as a co owner now, because that can negatively impact your ability to get benefits in the future. Rather, we'd want to utilize the ladybird deed because the ladybird deed is not a gift. Because if you recall, you only say what happens, who gets the property after you pass away. You retain the right to change your mind, you retain the right to remove these people, or sell the property out from under them without their permission. And because of that fact, they have no present interest in the property, when you record a ladybird deed. Because you haven't given them anything of value, right now, it's not deemed a gift. The only time they get value is after you pass away if you chosen not to make any changes to that ladybird deed.

[@lewisautomatic]

Why would someone want a trust instead of a Lady Bird Deed if they have only one property, have PODs and TODs on bank accounts, mutual funds and retirement accounts and they have a will with power of attorney and medical directives in place?

[@elderneedslaw]

Great question! I address this in two other videos:
ruclips.net/video/r3uSbZw8ooE/видео.html
ruclips.net/video/xAEkE6UHz68/видео.html
Hope you find this helpful!

[@tommylusk1799]

@@elderneedslaw Thanks Jason.

[@davidwilliamson6583]

CAN YOU DO A LADYBIRD DEED IN FLORIDA AFTER YOU HAVE ALREADY BEEN ON MEDICAID FOR 12 YEARS?...OR DOES THIS PROCESS HAVE TO HAVE ALREADY BEEN DONE BEFORE APPLYING?

[@elderneedslaw]

Can do a lady bird deed even after being on Medicaid.

[@user-ty4om1yf3t]

Can a husband and wife get 1 lady bird deed or do they each need 1 for their 50% of home in Florida?

[@elderneedslaw]

It depends on how the house is titled. Usually (if owned as tenants-by-the-entirety or as joint tenants) they both would sign one lady bird deed. If they own as tenants-in-common, they might each need their own lady bird deed.