Lacey Rezanka, an estate planning law firm located in Melbourne, Florida, has published a new educational resource for Brevard County homeowners examining when a Lady Bird deed is, and is not, the right probate-avoidance tool under Florida law. The resource is part of the firm's ongoing client-education series and is available on the firm's website. The full article is titled "Lady Bird Deeds: Florida's Estate Planning Secret for Homeowners" and addresses a topic that has gained visibility through social media but is frequently misunderstood by Florida homeowners.
A Lady Bird deed, also known as an enhanced life estate deed, allows a Florida homeowner to designate a beneficiary who automatically receives the property at the owner's death without the property passing through probate. Unlike a traditional life estate, the deed reserves the homeowner's right to sell, mortgage, occupy, and revoke the property during the owner's lifetime, with no interest transferring to the named beneficiary until death. The firm's real estate law and estate planning practice areas address these deeds for clients across Melbourne, Viera, Suntree, Rockledge, Palm Bay, and surrounding Brevard County communities along the Space Coast.
The resource walks through the specific scenarios in which a Lady Bird deed performs well and the scenarios in which a revocable trust is typically the better instrument. Homeowners in Melbourne, Indialantic, Satellite Beach, Merritt Island, Cocoa, and other Space Coast communities benefit from Florida's homestead protections, including the constitutional creditor protection and the 3% annual cap on assessed-value increases for primary residences. Because no title transfer occurs during the homeowner's lifetime under a properly drafted Lady Bird deed, these homestead protections remain intact. By contrast, outright gifting of a home to a child during the owner's lifetime can trigger a full property reassessment, which for a longtime Brevard County homeowner can shift a tax bill from approximately $1,500 to approximately $8,500 in a single year, according to the firm's resource.
The new article also addresses the federal stepped-up cost basis that beneficiaries receive when property transfers at death rather than during the owner's lifetime. Under Internal Revenue Code Section 1014, the beneficiary's cost basis is adjusted to the fair market value of the property on the date of death, which can eliminate capital gains tax on appreciation that accumulated during the owner's lifetime. For Brevard County and Indian River County homeowners who purchased property decades ago and have watched values rise substantially, the firm notes that this difference can represent a significant amount of preserved family wealth.
"A Lady Bird deed is a useful instrument when the circumstances are right, but it is not a universal solution," said Stephen J. Lacey, Esq., Managing Member of Lacey Rezanka. "Where the named beneficiary outlives the homeowner and there are no complicating family or benefits-eligibility factors, the deed accomplishes exactly what it is supposed to accomplish. Where a beneficiary predeceases the homeowner, where multiple beneficiaries are named and have no contractual mechanism to resolve disputes over the property, or where a beneficiary is receiving needs-based public benefits, a revocable trust is generally the better tool because the trust can be drafted with contingencies that a deed cannot."
The resource identifies several recurring drafting and execution errors that the firm encounters in deeds prepared elsewhere, including failure to reserve the grantor's rights in the deed language (which converts the instrument into a traditional life estate), failure to comply with Florida homestead joinder requirements when the grantor is married, and failure to update the deed when a named beneficiary's circumstances change. Mr. Lacey notes that these errors are not limited to do-it-yourself or online forms; the firm has observed the same mistakes in deeds prepared by title companies and other attorneys. Under Florida law, a valid Lady Bird deed must contain explicit enhanced-life-estate language reserving the grantor's rights, must be signed in the presence of two witnesses and a notary, and must comply with Florida homestead spousal-joinder rules.
Lacey Rezanka is located at 6013 Farcenda Pl, Suite 101, Melbourne, FL 32940, and serves clients across Brevard County and Indian River County, including Melbourne, Viera, Suntree, Rockledge, Palm Bay, West Melbourne, Indialantic, Indian Harbour Beach, Satellite Beach, Merritt Island, Cocoa, Cocoa Beach, Cape Canaveral, Titusville, and Vero Beach. Initial consultations are scheduled by phone and accommodate in-person and virtual meetings. Learn more at https://llr.law or call (321) 608-0890.
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For more information about Lacey Rezanka, contact the company here:
Lacey Rezanka
Lacey Rezanka
321-608-0890
info@llr.law
6013 Farcenda Pl, #101, Melbourne, FL 32940