What a Florida Lady Bird Deed Actually Does

A house stuck in Florida probate a year after a parent's death is why a lady bird deed skips court, keeps the step up in basis, and costs nothing now.

Transcript

A version of this call comes in a few times a year. A parent died last spring, the house is still sitting there almost a year later, nobody can sell it or refinance it, and the insurance carrier keeps asking who owns it. The parent had a will, and the will said the house goes to the daughter. That is why the house is stuck. A will is an instruction to a judge, and somebody has to open a court case before anyone is allowed to follow it.

So how do you keep a house like that out of court entirely, while still getting the tax break that comes from dying with it instead of giving it away? Three things settle that. First, what a Lady Bird deed is and how it lets you keep full control while you’re alive. Second, what it protects against, and what it doesn’t, from probate costs to Medicaid to your own creditors. Third, the traps that quietly void it.

Here is what that case costs in Florida. On a four hundred thousand dollar estate, the attorney’s fee the statute presumes reasonable is about twelve thousand dollars, because section 733.6171 sets it at three thousand plus three percent of everything over a hundred thousand. The personal representative’s commission under section 733.617 runs about another twelve thousand on that same estate. So roughly twenty four thousand dollars, before the filing fee and the publication cost and the certified copies. Formal administration typically takes six to eighteen months, and there is a three month window where creditors get to file claims before anything can safely be distributed. That whole time, the house does nothing.

The deed I want to talk about today avoids all of it for the house, and most Florida homeowners have never heard of it. Its real name is an enhanced life estate deed. The nickname is a Lady Bird deed, and the story is that a Florida attorney used President Johnson and his wife as the example names when he taught the concept, and the name stuck. Lyndon Johnson almost certainly never signed one. It is a teaching mnemonic, not presidential history.

What the deed does is split your ownership in two. You keep a life estate with enhanced powers, and you name the people who get the remainder when you die. Nothing transfers while you are alive. You still own the house in every practical sense. You can sell it tomorrow without asking your children, you can mortgage it, refinance it, rent it out, take a home equity line on it, change the beneficiaries, or tear the whole thing up and deed it back to yourself. Your children do not have to consent and they do not even have to know. That power to cut them out is the clause that makes the deed work, and Florida case law backs it, going back to Aetna versus LaGasse in 1969, where the life tenant with those powers could convey the entire property without the remaindermen joining.

When you die, title moves to the people you named by operation of law, at the moment of death. Section 731.201 defines the probate estate to exclude property that passes by operation of law, so the house never enters the estate. Your children take a certified death certificate and a one page survivorship affidavit to the county recorder, and that is ordinarily the whole process. No petition, no personal representative, no creditor period, and no statutory fee calculated on the value of your house. It also means the house sits outside any fight over the will.

The tax piece is the reason careful planners use this instead of just signing the house over to a child. If you give the house away during your life, your child takes your original cost with it. Buy a house for ninety thousand decades ago, give it to your daughter, and her cost basis is ninety thousand. If she sells it for three hundred thousand, she is taxed on two hundred ten thousand dollars of gain. At the fifteen percent federal capital gains rate that is over thirty thousand dollars, and north of forty thousand if she is in the twenty percent bracket or pays the three point eight percent investment income tax on top. Keep the house until death and the basis resets to fair market value under section 1014, so that same sale produces close to zero gain. The Lady Bird deed keeps the house in your taxable estate on purpose, under section 2036, because that inclusion is what earns the step up. Once you sign a quitclaim to a child, the carryover basis is locked in and there is no fixing it later.

Be clear about what this deed does not do. It does not protect the house from your own creditors while you are alive. A judgment lien still attaches. It also does not help you qualify for Medicaid, because your Florida homestead is already an exempt resource. What it does is put the house outside Medicaid estate recovery, which in Florida reaches only the probate estate. And the state’s own manual, DCF ESS section 1640.0613.01, says that when someone uses a Lady Bird deed, no transfer has occurred, because the individual retains full ownership powers. So there is no five year look back problem. You can record the deed and apply for Medicaid the next day.

Now the traps, because this deed fails quietly. If you are married and the house is your homestead, your spouse has to join the deed, or the deed is void as to the homestead under Article Ten Section Four of the Florida Constitution. There is a safe harbor waiver under section 732.7025 that lets a spouse give up the devise restriction, and it has to say what the statute says. If you have a minor child, that child’s homestead protection cannot be waived at all, and a Lady Bird deed to anyone else does not work. The legal description has to be copied from your prior recorded deed and not off the tax bill. You need survivorship language, so that a child who dies before you does not push their share into their own probate. And the deed has to actually get recorded, because one found in a drawer after the funeral is worth nothing.

Two more things the family needs to know. Your homestead exemption and your Save Our Homes cap do not follow the house. Whoever inherits has to file for their own exemption with the county property appraiser by March 1 of the following year, or the property gets reassessed at full market value and the tax bill jumps. And if you refinance or take a reverse mortgage years after signing, that later instrument can override the Lady Bird remainder without anyone noticing, so tell your lawyer before you sign new financing on a house that already has one of these on it.

The one thing to do this week is pull the actual recorded deed to your home and read how title is held. Not the tax bill and not what you remember. If it is in one name, in two names, in a trust, or has your son already added to it, that single fact decides which deed you need and whether one of these will even work. Bring that recorded deed with you when you sit down with a lawyer. We draft these, we check title and marital status before we draft, and we walk the signed deed to the clerk ourselves so it actually gets recorded.

Read the full guide at stepuplaw.com/florida-enhanced-life-estate-deed

Related reading and listening at StepUpLaw

• Does a Lady Bird Deed Get a Step-Up in Basis?
• Florida Lady Bird Deed & Medicaid: Protect the Home (2026)
• Can a Lady Bird Deed Be Contested in Florida? (2026)
• Episode 4, Lady Bird Deed or Living Trust for a Florida Home
• Episode 5, Lady Bird Deeds, the Medicaid Look Back, and Estate Recovery
• Episode 2, A Florida Homestead Deed Fails Without Your Spouse’s Signature

Related guides

• Does a Lady Bird Deed Get a Step-Up in Basis?
• Florida Lady Bird Deed & Medicaid: Protect the Home (2026)
• Can a Lady Bird Deed Be Contested in Florida? (2026)

Stepping Up is hosted by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. Episodes are general information about Florida law, not legal advice, and listening does not create an attorney-client relationship.