How Can I Transfer My House to a Family Member?
If you own your home or other Florida real estate, you should give some thought to how you wish to dispose of such properties upon your death. Many Florida residents use an estate planning device called a revocable living trust to avoid probate. But a trust is only one method for dealing with succession to real property ownership.
Transferring Real Estate Into a Trust
A trust is basically a legal document transferring ownership of certain property to a trustee. In the case of a revocable living trust, you generally name yourself as the trustee. This allows you to retain full control of all trust property during your lifetime. When you pass away, a successor trustee named in your trust instrument assumes control and distributes the property as you direct. The trust is revocable in that you are free to amend or revoke it while you are still alive.
However, creating a revocable living trust involves more than signing a trust instrument. You must also transfer property into the trust. For real property that means signing a new deed transferring legal title from you as an individual to you as the trustee. This may seem like pointless semantics, but it is legally necessary for the trust to be considered the legal owner.
There is a potential downside to transferring your principal residence—or homestead—into a revocable trust. A Florida homestead enjoys special protection from creditors, and in many Florida counties there are also tax benefits. These benefits may be compromised if the homestead property is transferred to a trust, even if you are the trustee. This is why you should always consult with an experienced St. Petersburg estate planning attorney before attempting to transfer any property into a trust.
Life Estates & Lady Bird Deeds
But a trust is not your only option for dealing with real property succession. Florida law recognizes a special type of property transfer called a “Lady Bird Deed.” This is also known as an “enhanced life estate deed.” A life estate is an arrangement whereby the owner deeds her property to a beneficiary (who may be herself), with the condition that one or more beneficiaries automatically assume ownership upon the beneficiary’s death.
The problem with a life estate deed is that can also restrict the original owner’s ability to sell or mortgage the property. The life tenant has certain legal rights that cannot be violated. A Lady Bird Deed is designed to give the owner more flexibility. For instance, a Lady Bird Deed still grants a life estate to the beneficiary, but the owner retains the ability to sell the property. A Lady Bird Deed may also have certain tax and Medicaid eligibility benefits depending on the situation.
Get Advice From a St. Petersburg Real Estate Lawyer
Property transfers often involve a complex web of laws and regulations. It is not a do-it-yourself project. If you have questions about the best way of managing the transfer of your property, it is best to speak with an experienced St. Petersburg real estate attorney as soon as possible. Contact the skilled attorneys at Carnal & Mansfield, P.A. for professional assistance today.