Lady Bird Deeds in Florida: How They Work, When They Fail, and How to Sell a House That Has One

Lady bird deed vs. a regular life estate deed

The difference is control. With a regular life estate deed, the beneficiaries own part of the house the day it is signed, and the owner needs their signatures to sell or borrow. A lady bird deed keeps every right with the owner until death.

Fla. Stat. § 193.155; Fla. Stat. § 738.801; Uniform Title Standards 6.10–6.12.

Why Florida owners use one

Most people sign a lady bird deed to keep the house out of probate while giving up nothing during their lifetime.

• No probate for the house. At death the owner's life estate ends and the house belongs to the named beneficiaries by operation of law. There is no court case to open for it.
• Homestead exemption stays. Signing the deed is not a change of ownership for property tax purposes, so the owner keeps the homestead exemption and the Save Our Homes cap on assessed value (Fla. Stat. § 193.155).
• Step-up in tax basis. Because the owner keeps control until death, the house is generally included in the owner's estate for federal tax purposes. Beneficiaries then usually take a basis equal to its value at the date of death, which can sharply cut capital gains tax when they sell (26 U.S.C. §§ 1014, 2036).
• Medicaid estate recovery. Florida's Medicaid estate recovery claim is made against the probate estate (Fla. Stat. § 409.9101). A house that passes outside probate has generally been outside that claim. Rules can change, so families relying on this should confirm it with an elder law attorney.
• Low cost compared with a trust. It is one deed, recorded once, with no trust to set up or fund.

Disadvantages, and when a lady bird deed fails

A lady bird deed works well for a single owner with a simple family. It fails, or sends the house back into probate, in a few predictable situations.

• A spouse who didn't join, or a minor child. Florida's constitution limits how a homestead can pass when the owner leaves a spouse or a minor child (Fla. Const. art. X, § 4(c); Fla. Stat. § 732.4015). If a married owner signed without the spouse joining and waiving homestead rights, title companies may treat the deed as ineffective at death.
• A beneficiary who died first. If a named beneficiary dies before the owner and the deed names no backup, that share can pass through the beneficiary's own estate, which may mean probate after all.
• Heirs who disagree. Every person named owns a share and must sign a sale. One holdout can stop it, and the fix is a partition action in court (Fla. Stat. ch. 64). See our guide on selling when heirs disagree.
• A minor beneficiary. A child can't sign a deed. Selling a minor's share needs a court-appointed guardian and court approval (Fla. Stat. § 744.441).
• Beneficiaries' debts. Once the owner dies, the house belongs to the beneficiaries, so their judgments and tax liens can attach to it.
• Weak wording. If the deed doesn't clearly reserve the owner's full powers, it can be read as a regular life estate, and the owner then needs the beneficiaries' signatures to sell.
• Lenders and title companies. Some lenders hesitate to refinance a house with one, and some title companies ask the beneficiaries to sign anyway.

Selling while the owner is alive

The owner can sell without the beneficiaries. That is the whole point of the reserved powers. The sale simply ends the lady bird deed for that house, and the beneficiaries have no claim to the money.

In practice, a few title companies still ask the beneficiaries to sign a deed or a joinder to be safe. If the deed was drafted properly, that isn't legally required, and another title company will usually close without it. If the owner is married and the house is a homestead, the spouse still has to sign, as with any Florida homestead sale.

After the owner dies: how heirs sell the house

The house passes at the moment of death, so there is nothing for a court to approve. What remains is paperwork that makes the title insurable, and then a normal sale.

1. Pull the recorded deed from the county clerk's official records. Confirm who is named, in what shares, and whether it names a backup if someone died first.
2. Record a certified death certificate in the county where the house sits. Use the copy without the cause of death. The clerk's recording fee is $10 for the first page and $8.50 for each additional page (Fla. Stat. § 28.24).
3. Answer the title company's affidavits. Expect questions about the owner's marital status when the deed was signed and at death, whether a minor child survived, and whether anything unrecorded happened during the owner's life, such as another deed, a mortgage or a lease.
4. Call the insurer and the mortgage servicer. A vacant house may not be covered under the old policy, and the servicer needs to know who now owns it.
5. Agree on the sale. Everyone named in the deed signs. If one person won't, see the partition note above.
6. Close. Liens that were on the house before the owner died, such as a mortgage or unpaid taxes, are paid from the sale.

There is generally no need to wait out the probate creditor period, because the house is not part of the probate estate (Fla. Stat. §§ 731.201, 733.702). Heirs who move in must file for their own homestead exemption; the owner's does not carry over (Fla. Stat. § 196.011).

A reverse mortgage on the house

A reverse mortgage comes due when the last borrower dies, and the lady bird deed doesn't change that. The beneficiaries take the house subject to the loan.

On a federally insured reverse mortgage (HECM), heirs are generally given about 30 days to tell the servicer what they plan to do and about six months to sell or pay off the loan, with extensions possible while a sale is in progress. Heirs can generally keep the house by paying the lower of the loan balance or 95% of the appraised value. If the house is worth less than the loan, the shortfall is not the heirs' personal debt.

Contact the servicer early, in writing, and keep copies. See our guide on selling a house with a reverse mortgage.

Lady bird deed vs. a living trust

Both keep a house out of probate. A trust costs more and does more; a lady bird deed is simpler but can't manage anything after death.

For a seller, the last row matters most: a trustee can sign alone, while a lady bird deed needs every beneficiary on board.

Questions people ask

Sources

• Lady Bird Deed & Other Non-Probate Transfer Techniques — Joseph M. Percopo, Dean Mead (OCBA presentation)
• Lady Bird Deed After Death in Florida — Jose Lorenzo Law
• Lady Bird Deeds in Florida: How They Work and When They Fail — EPPG Law
• Florida Lady Bird Deed — Zoecklein Law
• Transfer on Death Deed Florida — Zoecklein Law