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Lady Bird Deed or Living Trust for a Florida Home

Episode 4 · 00:08:52 · Published 2026-09-26

A Florida lady bird deed costs about $400 and skips probate, but a wrong legal description or a missing spousal waiver can undo the whole transfer.

Is a lady bird deed better than a living trust for a Florida home? A lady bird deed lets a homeowner keep full control during life and pass the house at death without probate, while keeping the homestead exemption, the Save Our Homes cap, and a full step up in basis under section 1014. It costs $400 to $1,000, far less than the $30,000 in presumptive fees a $500,000 probate estate carries under section 733.6171.

The deed can be contested when the legal description does not match the prior recorded deed, when a spouse has not joined, or when the enhanced powers language is loose enough to create a completed gift instead of a retained life estate. A minor child's homestead protection cannot be waived away.

Do you pay taxes on a lady bird deed in Florida? No transfer tax is due beyond the seventy cent minimum, and Florida Medicaid treats it as no transfer, so there is no look back penalty. Is a lady bird deed better than a trust? For one solvent adult child it often is, but StepUpLaw covers why naming a revocable trust as the remainder beneficiary handles what a deed alone cannot.

Transcript

A family shows up at a closing table with two pieces of paper. A lady bird deed the mother signed in 2019, and a certified death certificate. That is supposed to be the entire transfer, no petition, no court order, no new deed. Then the title agent puts the legal description on the deed next to the description on the prior recorded deed and they don’t match, because whoever drafted it copied the description off the tax bill. The house that was supposed to change hands that afternoon is now a quiet title action or a probate, and the buyer is gone. The deed cost four hundred dollars. Fixing it costs many times that, and nobody found out until the one day it mattered.

The question is whether one cheap deed can really replace a trust. First you’ll hear what a lady bird deed does right, the taxes it saves and the Medicaid transfer it avoids. Then where it breaks down, a spouse left out, a minor child, a sloppy sentence, a beneficiary on SSI. And last, what to do instead, naming your trust as the remainder so one death doesn’t undo the plan.

A lady bird deed, when it’s drafted right, is the best four hundred to one thousand dollars in Florida estate planning. Florida has no transfer on death deed statute, so this is the deed-based way to move a house at death outside probate. You keep an enhanced life estate. You can sell the house, mortgage it, lease it, change the beneficiaries, or tear the whole thing up, and you never need the beneficiaries’ permission or even their knowledge. At your death, title vests in whoever you named, by operation of law. Section 731.201 excludes property that passes by operation of law from the probate estate, so a personal representative has no authority over that house at all. It sits outside the will contest and outside the creditor claim process.

The tax and Medicaid picture during your life is untouched, and this is the part people get wrong when they try to do it themselves by gifting the house to a child. Because you kept a retained interest, the house stays in your taxable estate under section 2036(a), and that is exactly what you want, because it produces a full basis step up under section 1014. A home bought for ninety thousand dollars and worth three hundred thousand at your death gives your children a three hundred thousand dollar basis. Gift that same house during your life and they take your ninety thousand dollar basis and pay tax on two hundred ten thousand dollars of gain, often over forty thousand dollars combined, and that mistake cannot be undone. There’s no completed gift, so no Form 709 and no use of the nineteen thousand dollar annual exclusion. Documentary stamp tax is the seventy cent minimum. Your fifty thousand dollar homestead exemption and your three percent Save Our Homes cap are both preserved, because signing the deed isn’t a change of ownership. And Florida’s DCF policy manual says in so many words that with a lady bird deed no transfer has occurred, so there’s no look back penalty and you can record the deed and apply for Medicaid the next day.

Here’s where the deed stops, and it stops in more places than people expect. If you’re married, your spouse has to join the deed, and if you want the house to go to anyone other than your spouse you need the section 732.7025 waiver language. That waiver covers the devise restriction and nothing else, not the elective share and not the lifetime joinder rule. If you have a minor child, the homestead cannot be devised away from that child and the protection cannot be waived by anyone. A lady bird deed to somebody else fails in that situation. And if the enhanced powers paragraph is written loosely, you haven’t got a lady bird deed at all, you’ve got an old fashioned life estate that’s a completed gift, a penalized Medicaid transfer, and a loss of control. A Florida appeals court said it in 2025 about as plainly as it can be said, that the survivor had a life estate, no more, no less. No power to sell, no right to the proceeds.

The beneficiary side has its own set of problems the deed can’t solve. If your adult child is on SSI or Medicaid, a direct remainder hands them a countable asset the day you die and blows their benefits, and that’s true even if they aren’t disabled, because a house they don’t live in is a countable resource against a two thousand dollar limit. If your child has judgment creditors or a shaky marriage, the house lands in their name fully exposed the moment you’re gone. If a beneficiary dies before you and the deed has no survivorship language, that share runs through their estate and you’re in probate anyway. If you name three children and two want to sell and one wants to live there, you’ve bought them a partition suit.

Then there’s everything in your life that isn’t that one house. Lady bird deeds work in five states, Florida, Michigan, Texas, Vermont and West Virginia, so your Carolina lake place needs an ancillary probate. The deed does nothing for the brokerage account you open next year, the rental you buy in 2029, or the inheritance you get from your own mother. It does nothing while you’re alive and losing capacity, and banks resist powers of attorney constantly, whatever chapter 709 says. For a married couple the first death usually takes care of itself through survivorship, and the whole problem lands at the second death, when the survivor is expected to re-record the deed and update every designation alone, in their eighties, with no spouse to catch the misses.

The numbers say what a missed asset costs. Florida’s presumptive attorney fee under section 733.6171 and the personal representative fee under section 733.617 are the same schedule, and both get paid, so a five hundred thousand dollar compensable estate carries thirty thousand dollars of presumptive fees and a million dollar estate carries sixty thousand. Real world uncontested probates often settle in at twenty to forty thousand on that million. Formal administration runs nine to eighteen months either way, and fee negotiation doesn’t shorten it. One forgotten account can pull the whole thing open.

The answer for most people isn’t choosing between the two. The structure I use is a lady bird deed on the homestead that names the revocable trust as the remainder beneficiary. The house keeps every lifetime advantage, the exemption, the Save Our Homes cap, the step up, the no transfer treatment for Medicaid, and at your death it pours into the trust and lands in whatever sub trust your family actually needs. A predeceased child, a disabled child, a creditor exposed child, a trustee with a power to sell. You amend the trust instead of re-recording a deed. Reserve the direct to child version for a sole adult beneficiary who’s solvent, not on benefits, and going to live in the house.

If you already have a lady bird deed, do one thing this week. Pull the recorded copy, read the paragraph listing the powers you kept, and confirm it says you can sell, mortgage, and completely divest the beneficiaries without their consent. Then compare the legal description word for word against the deed you got when you bought the place. If you’ve refinanced, taken a HELOC, or signed a reverse mortgage since you recorded it, that later instrument may have quietly wiped out the death transfer and nobody will find out until the closing table. Reading a deed against the title is ordinary work, I do it regularly, and it’s a great deal cheaper than the probate that follows a bad one.

Read the full guide at stepuplaw.com/florida-ladybird-deed-vs-living-trust

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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.

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