One critical part of the estate planning process is deciding how to pass on real estate once you pass away. Two options for doing so here in Florida are to pursue a life estate or an enhanced life estate deed.
As you’ll note, there’s only a subtle difference in the names of these two types of deeds, which is the word “enhanced.” This word carries special weight in this instance. You’ll want to apprise yourself of what that is.
What is a life estate deed, and how does it contrast with an enhanced one?
Florida is one of only five states that recognizes enhanced life estate deeds, also known as a Lady Bird deed.
A standard life estate deed allows a homeowner or other property owner to transfer their property to someone else before their death. That property owner loses the ability to sell the home or mortgage it without first receiving the joinder and remaindermen’s permission to do so. Joinders are parties to a sale or mortgage. Remaindermen are beneficiaries of that sale. A standard life estate essentially allows a homeowner to remain in their property until their death while assigning the deed over to the remaindermen at present.
The difference between a standard and an enhanced life estate arises because, in the latter case, an owner retains the right to mortgage or sell their property without first seeking consent from their beneficiaries. Property transferred as part of the standard, or enhanced life estate deed approach may avoid the probate process unless one of the remainder beneficiaries predeceases the tenant. If this event happens, then the property transfer can only occur once it passes through probate.
Why you may need an attorney to guide you through the life deed process
One common mistake homeowners make is inadvertently setting up a standard life estate when they intended to create an enhanced one. Homeowners often find themselves unclear about their rights once they agree to pursue either one of these options as well. An attorney can help you understand the subtleties between these two and advise you of the steps that you’ll need to take to complete the process.