When Florida residents plan their estates, their goal is to make it easier for their loved ones to inherit their property. The two most common tools for doing so are Lady Bird deeds and revocable living trusts. Although they serve different functions, there are some cases where they can help you avoid probate. A Florida estate planning lawyer can help you determine which option is best for your family.
What is a Lady Bird deed?
The Lady Bird deed (also called an enhanced life estate deed) is a special type of deed that is recognised in Florida. It allows a property owner to pass real estate on to beneficiaries at death, while retaining full use of the property during their lifetime.
With a Lady Bird deed, the owner can continue to live in the home, sell the property, refinance it, or even revoke the deed without the permission of the beneficiaries. The beneficiaries do not get ownership rights until the owner dies.
One reason these deeds are popular is that they can transfer real property outside of the probate process. This could save time and some of the costs involved in settling an estate.
What is a revocable living trust?
A revocable living trust is a legal document that holds assets for the benefit of the person creating the trust and ultimately for the benefit of the beneficiaries he or she names. Often, the grantor is the person who sets up the trust.
In most cases, the grantor and the trustee are one and the same, and will manage the trust assets during their lifetime. While the grantor is alive and mentally competent, the trust can be cancelled, its provisions changed, or it can be revoked entirely.
Should the grantor die, a successor trustee will distribute the assets held in the trust as outlined.
How are these tools similar?
Enhanced life estate deeds (or Lady Bird deeds) and revocable living trusts can help property pass to beneficiaries without going through probate. Both also allow the property owner to retain control of assets during their lifetime.
Flexibility is another similarity. Generally, a property owner may change beneficiaries or change arrangements in their lifetime. Both tools can also be part of a larger estate plan that may include a will, powers of attorney, and healthcare directives.
What are the main differences?
The main difference is scope. A Lady Bird deed applies to a specific piece of real property. It has no control over bank accounts, investments, vehicles, or other property.
A revocable living trust may own a variety of different kinds of assets. That makes it a better planning tool for people with multiple assets or more complicated estate-planning goals.
If the person who created it is no longer able to, a trust can be a better way to manage things. The successor trustee may manage the trust property in accordance with the terms of the trust. Other planning documents can help to address incapacity, but a trust often adds an extra layer of continuity.
A Florida estate planning attorney can help you understand how these differences may impact your estate plan.
Which option may be right for you?
That depends on your assets, your family situation, and your goals in the long run. Some Florida residents have a Lady Bird deed because they own a primary home and want a simple way to transfer it to children or other loved ones upon death.
Some opt for a revocable living trust because they own several properties, have blended families, want more privacy, or require a more complete estate planning approach.
Sometimes, both tools can be used together. A trust can own many assets, for example, whereas a Lady Bird deed is for one specific property. Estate planning is seldom a one-size-fits-all exercise, and customised legal advice can be of great value.
Why is professional guidance important?
Estate planning documents have to be done right to work the way they are intended. Mistakes could lead to confusion, arguments, or unintended consequences for loved ones.
An experienced attorney can look at your goals and suggest options that work for you. Legal advice can help you make informed decisions, whether you are considering a Lady Bird deed, revocable living trust, or other planning tools.
If you want to learn more about protecting your property and making it easier to pass your assets on to your loved ones, Estate Plan First PLLC is the place to go. A skilled Florida estate planning lawyer will review your situation, discuss your options with you, and develop a plan that addresses the needs and goals of your loved ones. Call (904) 595-1744 or fill out our online contact form.
