If you’re planning to leave your home or other property to your heirs, there are a few things you’ll want to consider. If you wish to gift property while you’re still living, the IRS will allow you to sell your home and pass on the proceeds through non-taxable cash gifts of up to $15,000 per year for each recipient. This can be a good option, depending on your preference.
However, if you wish with to bequeath property after you pass away, there are certain ways to do it that can help you avoid probate:
Lady Bird deed
The Florida Realtors website notes that homeowners may avert probate by creating an enhanced life estate deed. Also referred to as a “Lady Bird deed,” this estate planning tool became popular after Lyndon B. Johnson used it to transfer property to his wife.
An enhanced life estate deed provides Florida homeowners with several advantages. It gives the property’s owner the legal right to remain living in his or her home until death. The property owner also has a right to control it and may sell it at any time.
When creating a Lady Bird deed, a homeowner typically adds heirs – known as remainder beneficiaries – to whom the property transfers when the owner dies. Another benefit is that Florida Medicaid may not have a right to file a claim against the property’s equity for unpaid bills after ownership passes on to the remainder beneficiaries.
Individuals with valuable assets may also consider creating a living trust and transferring their properties to it. In order to fund the trust, a property owner must retitle the deeds of any desired properties into the trust’s name to confirm ownership. A living trust also requires naming a trustee who can manage real estate assets on behalf of the beneficiaries.
Florida estate planning laws offer several methods for leaving properties to heirs without the lengthy probate process. Taking proactive steps to title assets may also avoid an inheritance contest between heirs.