Two recent articles: one by the Florida Association of Realtors and one by the AARP describe how to leave your real estate to another person…will or trust? (article links at the end). They got me thinking…
A couple of years ago Art and I redid our will to make it more current. I soon learned that despite a will that leaves our house to son, it would still require him to hire a lawyer and go through probate. SO I started questioning…how can we skip that probate stuff? Someone mentioned quit claim deed and lady bird deed. I know a quit claim deed makes the heir a current owner with owner rights. i.e. He/She could sell the property…Is a trust better? (My understanding is that a trust requires almost all assets including the real estate be a part of a trust.) Always better to have an heir as a beneficiary on assets like bank accounts IRAs etc.
But then I heard about a Lady Bird Deed! (full article at end)
… With a standard life estate deed, you could name a beneficiary to inherit your property while you keep ownership of it for your lifetime, but with significant restrictions. You wouldn’t have the right to sell or mortgage the property, and you might also be liable to the beneficiary you named if you greatly decreased the value of the property—for example, let a house fall into serious disrepair.
By contrast, an enhanced life estate deed (the Lady Bird deed) lets you:
- avoid probate of the property
- keep the right to use and profit from the property for your lifetime
- keep the right to sell the property at any time
- avoid making a gift that might be subject to federal gift tax
- avoid jeopardizing your eligibility for Medicaid
- in some states, prevent the property from being sold, after your death, to repay the cost of Medicaid benefits you received
Still having questions, I called four law firms two lawyers did return my phone call to answer some questions.
If we have a will and both die, son inherits my house… he calls the lawyer. It goes through probate…How long does probate take? It can take six weeks or more. How much do they charge for probate work? Some lawyers charge a flat fee, some a percentage of the estate etc.—- I think a lot of money! After talking to our lawyer, we will set up a Lady Bird Deed (cost of about $200 and $20 filing fee).
JUST SOMETHING TO THINK ABOUT!
—AND by the way, as a realtor, I have had some real estate transactions fall through because an outstate lawyer drew up a will or trust and it did not meet Florida requirements. Check it out, if that pertains to you.
AARP article on trusts:
When I Googled “Lady Bird Deed” I found this:
Two law firms (both in Inverness) who returned my call and do handle wills, trusts, deeds:
Slaymaker Nelson: 352-726-6129
Stillwell Perrin: 352-726-6744