As we get older and move into the retirement phase of life, it is common to have two concerns: 1) how do we assure ourselves of a safe and stable place to live throughout our years, and 2) how do we pass our assets on to our loved ones without them being depleted by creditors, taxes, and legal fees? Floridians have the benefit of an estate planning tool called an "Enhanced Life Estate Deed" or, alternatively named a "Lady Bird Deed" (an arbitrary reference to the former first lady given by the tool's originator with no meaningful connection to the qualities of the deed). By working with an estate planning attorney to create an enhanced life estate deed, you can enjoy the benefits of having full control over your own home while at the same time protecting the value of that home for your beneficiaries and avoiding adverse Medicaid consequences.
HOW AN ENHANCED LIFE ESTATE DEED WORKS
When you create an enhanced life estate deed, you will name a beneficiary for your home who should receive your property upon your death. At the time of your death, the property will transfer to that beneficiary outside of the probate process, which benefits your beneficiary because he or she will receive the property without delay and will not have to hire an attorney to go to probate court in order to obtain the property.
Notably, though, with an enhanced life estate deed, you as the current owner of the home will retain your full property rights in the home. This means that you can make changes to the property that may affect the value of the property, and you can even take out a mortgage on the property without incurring potential legal liability from the beneficiary who will be the future owner (in this sense, you are more than simply a tenant on your own property). You also retain the right to rescind to revoke the beneficiary's interest in the property at any point prior to your death and for any reason.
It is important to note that property deeds that contain a right to survivorship may not be fully eligible for future transfer via an enhanced life estate deed. Furthermore, those persons who have a surviving spouse or minor child at their time of death may not be able to fully utilize such a deed, and therefore it can be critical to work with a Florida estate planning attorney to sort such issues out.
MEDICAID BENEFITS OF A FLORIDA ENHANCED LIFE ESTATE DEED
Many Floridians also choose to create an enhanced life estate deed because of several issues relating to Medicaid eligibility and reimbursement.
First of all, one benefit of an enhanced life estate deed is that creating such a deed should not count as a disqualifying event when applying for Medicaid. Eligibility for Medicaid will look at transfers of property made in the five years prior to application, but, because the transfer of property pursuant to an enhanced life estate deed will not occur until death, it should not affect that eligibility.
Second, the government will often make a claim in probate upon a Medicaid recipient's death for reimbursement of Medicaid costs. Because an enhanced life estate deed works to transfer property outside of the probate process, however, you can protect your beneficiary from having your home asset depleted via that recovery process.
CONTACT RYAN MYNARD TODAY ABOUT CREATING AN ENHANCED LIFE ESTATE DEED
To being the process of creating a Florida enhanced life estate deed - or to speak about any estate planning questions or concerns you have - contact Florida estate planning attorney Ryan Mynard at 850-683-3940 today to get started.