Lady Bird Deed vs. Florida Land Trust: Which Is Best for Protecting Your Florida Real Estate?
Monday, April 14, 2025
When it comes to estate planning and protecting real estate in Florida, two strategies often come up: the Lady Bird Deed and the Florida Land Trust. Both can help avoid probate and ensure a smooth transfer of assets, but they serve very different purposes. Choosing the right one depends on your financial goals, the type of property you own, and the level of privacy and protection you’re looking for.
This guide breaks down the key differences, benefits, and potential drawbacks of both options. Whether you're a homeowner, real estate investor, or someone preparing a long-term estate plan, understanding these tools can help you make smarter decisions about your property.
What Is a Lady Bird Deed?
A Lady Bird Deed, also known as an Enhanced Life Estate Deed, is an estate planning tool that allows you to retain control of your property during your lifetime while naming a beneficiary who will automatically inherit it when you pass away. This tool avoids the probate process, meaning the property doesn't have to go through the court system to be transferred, which can save your heirs time, legal fees, and hassle.
Another significant advantage is the step-up in basis. This means the person inheriting the property receives it at its market value at the time of your death—helping them avoid capital gains taxes if they choose to sell. For example, if you bought a home for $100,000 and it’s worth $300,000 when you pass, the beneficiary’s basis becomes $300,000, not $100,000. If they sell it shortly after, they may owe little to no capital gains tax.
However, Lady Bird Deeds are only available in five states, including Florida, and they don’t offer much in terms of asset protection or privacy. Your name remains on public record as the owner of the property, and the property remains subject to any personal liabilities or lawsuits you may face during your lifetime.
What Is a Florida Land Trust?
A Florida Land Trust is a unique type of trust specifically recognized under Florida law. It allows the legal title of the property to be held by a trustee while the beneficial interest (meaning full control, use, and enjoyment of the property) remains with you, the property owner. This structure not only allows the property to bypass probate upon your death but also offers enhanced privacy and protection during your lifetime.
When you create a Florida Land Trust, your name does not appear on public records as the property owner—the name of the trust does. This can be especially valuable for high-net-worth individuals, real estate investors, or anyone who wants to avoid public scrutiny. Additionally, Florida is unique in that its land trusts offer asset protection—meaning your property held in the trust is shielded from personal creditors and potential lawsuits, as long as the structure is set up and maintained properly.
Land trusts are often used for both primary residences and investment properties, particularly in situations where the owner wants to maintain privacy and reduce exposure to legal risks. They also offer flexibility in terms of estate planning: you can assign beneficial interest to heirs, business partners, or entities without needing to retitle the property or make public changes.
Key Differences Between a Lady Bird Deed and Florida Land Trust
At first glance, both tools may seem to accomplish the same thing: transferring property upon death without probate. However, they differ significantly in scope, flexibility, and legal protection.
A Lady Bird Deed is simpler and less costly to set up, making it a good fit for homeowners with straightforward needs. In contrast, a Florida Land Trust offers more robust protections and planning options, especially for those concerned with lawsuits, privacy, and long-term control over how the property is handled after their death.
When to Use a Lady Bird Deed
A Lady Bird Deed is best for people who want to pass real estate to their heirs with minimal expense and no probate. It works especially well for:
- Seniors looking to avoid Medicaid estate recovery.
- Homeowners with only one or two beneficiaries.
- Individuals who don’t require privacy or protection from creditors.
It’s also an ideal choice if your primary goal is estate planning rather than asset protection. Since it’s simple to draft and doesn’t require the creation of a trust, it can be handled affordably through many estate planning attorneys. However, this simplicity comes at a cost—it lacks flexibility if your wishes change over time and does little to protect you while you're alive.
When to Use a Florida Land Trust
A Florida Land Trust is best suited for individuals with more complex needs, such as real estate investors, landlords, or high-net-worth individuals. This trust is a strong choice if:
- You own multiple properties, including rental or commercial assets.
- You’re concerned about being targeted in lawsuits.
- You want to keep your property ownership private.
- You want flexible estate planning tools that allow you to control how and when assets are distributed.
In Florida, a Land Trust not only avoids probate but also offers liability shielding and anonymity—two critical features that a Lady Bird Deed lacks. It’s particularly beneficial for landlords and those with non-homestead properties, which tend to carry more risk. You can even combine the land trust with LLCs for added protection and estate planning versatility.
Final Thoughts: Which Is Right for You?
Both the Lady Bird Deed and Florida Land Trust are powerful tools, but they are not interchangeable. If you’re only looking to pass your home to your children without probate, the Lady Bird Deed can be a cost-effective solution. But if your priorities include privacy, asset protection, and long-term estate control, the Florida Land Trust is likely the better choice.
It’s essential to remember that estate planning is not one-size-fits-all. Everyone’s situation is different, and the best approach depends on your unique financial, legal, and personal goals. In many cases, combining strategies—such as using a trust for asset protection and a deed for specific transfers—can offer the best of both worlds.
Talk to a Professional Before You Decide
Because the legal and financial implications can be complex, it’s always wise to consult with a Florida-based estate planning attorney or real estate attorney. They can guide you through your options, ensure compliance with state law, and help you create a plan that meets both your current needs and your long-term goals.
Copyright © 2024, Uplevel Entrepreneur, LLC. All rights reserved.
This site is not a part of the Facebook website or Facebook, Inc. Additionally, this site is not endorsed by Facebook in any way. FACEBOOK is a trademark of FACEBOOK, Inc.
Facebook makes us say all of the above. Sorry. Now for some more legal stuff. You had to know this was coming. After all, didn't we tell you that Edward is a lawyer. TERMS OF SERVICE