What is an Enhanced Life Estate Deed (a/k/a “Lady Bird Deed”)?
The ELED is a relatively new concept in the law but has rapidly increased in popularity
An Enhanced Life Estate Deed (ELED), also known as a "Lady Bird Deed," is a tool Florida real estate owners use to transfer property ownership without undergoing probate. The origins of this type of deed date back to President Lyndon B. Johnson's tenure as a Texas state legislator. He was interested in providing an alternative to the traditional life estate deed, which was restrictive and problematic. The ELED is a relatively new concept in the law but has rapidly increased in popularity in the states where it is permitted (Florida being one of them).
An ELED is a legal document that grants the owner (the grantor) the right to live in and use their property during their lifetime, with the property passing automatically to the designated beneficiary upon the grantor's death. The beneficiary receives the property immediately upon the grantor's death, avoiding the probate process altogether. The grantor retains control of the property, which can be sold or transferred to another party at any time without the beneficiary's consent.
Unlike a traditional life estate deed, an ELED allows the grantor to retain significant control over the property during their lifetime. The grantor can sell, mortgage, or lease the property without the beneficiary's consent and revoke or change the beneficiary designation at any time. Additionally, an ELED may be used to protect the property from Medicaid recovery, as the property does not pass to the beneficiary until after the grantor's death.
One of the primary benefits of an ELED is that it can help the grantor avoid probate, which is often a costly and time-consuming process. Probate can tie up a property for several months, sometimes even years, causing significant hardship for the beneficiaries. Additionally, probate court proceedings are a matter of public record, which can be uncomfortable for some families.
An ELED differs from a regular life estate deed or ordinary deed in several ways. A traditional life estate deed grants a life interest in the property to the grantee, who cannot sell, mortgage, or transfer the property during the grantor's lifetime. Upon the grantor's death, the property passes to the designated beneficiary. In contrast, an ELED allows the grantor to retain significant control over the property during their lifetime and eliminates the need for the property to go through probate.
In conclusion, an Enhanced Life Estate Deed can be a useful tool for Florida real estate owners who wish to transfer their property to a designated beneficiary upon their death without undergoing probate. As a Florida real estate attorney, we recommend that anyone considering an ELED consult with an experienced attorney to ensure their specific needs are met and avoid potential legal pitfalls.