By: Rima Suleiman

The lady bird deed is an estate planning tool, allowing Florida residents to transfer property while avoiding probate. Please see below a complete overview of this unique tool.

1, What is a Lady Bird Deed?

The lady bird deed is a type of deed that conveys real property ownership from one party (the Grantor) to another party or parties (the beneficiaries or remaindermen), upon the death of the grantor, without the need for probate. 

A lady bird deed is also called an “enhanced life estate deed” because it is a life estate deed with more control. A life estate deed allows an owner to use his/her property during their lifetime, while giving away ownership of the property after death. The property interest kept during the owner’s life is called a “life estate,” and the property interest given away is called a “remainder.” After the owner dies, the person with the remainder becomes the full owner of the property.

The big advantage of a traditional life estate deed is that it avoids probate. The remainder beneficiary does not have to wait for a court to approve the transfer after death; rather, the whole transfer is automatic. This makes life estate deeds incredibly useful for estate planning because it makes things easier for the owner’s loved ones after he/she passes. However, there is also a big disadvantage to a traditional life estate deed; the future owner or beneficiary is a co-owner with the life tenant. Because of this co-ownership, the grantor cannot deal with the property as they see fit; they require the co-owners’ approval.

A lady bird deed solves the big problem of life estate deeds. The “enhancement” is that the person keeping the life estate retains complete ownership of the property. He/she can do as they please with the property without the involvement of the remainder beneficiary, including the right to change the beneficiaries as he/she wishes, sell the property, and/or mortgage it. The lady bird deed accomplishes this by not allowing the remainder beneficiary’s title to vest until the death of the grantor.

. 2. Does a Lady Bird Deed Avoid Probate?

Yes, similar to the life estate deed, the lady bird deed will let you avoid the probate court in Florida. When you pass away, your interest in the property goes away and the person you list as a beneficiary on the deed gains full ownership of the property outside of the probate code.

Avoiding probate also allows the property to pass without involvement from the personal representative of the estate. This can alleviate a lot of frustration on the part of the beneficiary of the property. It can also save money, as probate can be a costly process.

However, if your main goal in using a lady bird deed is to avoid probate, you should take steps to ensure that the deed is drafted properly. Incorrect drafting can cause many problems, and without proper planning, this occurrence could result in the property still needing to be probated. 

3. Is a Lady Bird Deed Revocable?

Yes, a lady bird deed can be revoked during the property owner’s lifetime. The lady bird deed expressly reserves the owner’s right to convey the property. To revoke a lady bird deed, all the owner needs to do is to validly execute a new deed. Thus, the new deed will extinguish the interest created by the old lady bird deed.

4. What Happens to a Lady Bird Deed After Death?

After the grantor of a lady bird deed dies, the property automatically transfers to the beneficiary listed on the deed. The beneficiary then owns the property. This transfer occurs without any probate of the property.

5. Does a Lady Bird Have to be Recorded?

The state of Florida does not require these deeds to be recorded. However, it is standard practice, and for good reason. In Florida, when a deed is recorded by the clerk of court, it is presumed to be delivered properly. This presumption is a requirement to have a valid deed. Without that validity, the deed could be challenged, resulting in massive consequences.

6. Does a Lady Bird Deed Affect the Florida Homestead Exemption?

No, it does not. The grantor maintains his/her Florida homestead tax exemption after executing a lady bird deed.

7. Does a Lady Bird Deed hinder Medicaid eligibility?

No, it does not. Since the transfer of the property owned does not occur until the grantor’s passing, it is not considered a gift that would hinder Medicaid eligibility.

By: Rima Suleiman

If you’re looking to relocate your corporation to Florida, you generally have three options to choose from. These options, along with each of their pros and cons, are outlined below:  

1. Conversion;

2. Dissolving your business and forming a new Florida Corporation; or

3. Keeping your corporation in your home state and Registering a Foreign Corporation in Florida.

1. Conversion: 

In Florida, conversion is the process of changing a foreign (out-of-state) entity into a domestic one (one based in Florida). Conversion permits the company to continue the day-to-day operations without any significant interruptions. When properly executed, this process ensures seamless continuation of operations while facilitating a smooth transfer of company to Florida. Continuity is ensured by the preservation of all aspects of the corporate entity’s identity, including bank accounts, credit rating, public records, and tax ID number. To file for Florida conversion, and have your company converted to a Florida corporation, you will need to do the following:

• Determine whether your state will recognize the conversion
  • You can only convert your corporation in Florida if your current state of incorporation recognizes the legal process of domestication. Pursuant to FL Stat § 607.11933, the conversion must be “approved by the eligible entity in accordance with its organic law.” Please note that your conversion may also not be recognized by your current state if your corporation is not in good standing due to delinquent annual report filings or other issues.

• Write a Plan of Conversion
  • A plan of conversion is an internal document drafted by the shareholders of your corporation that formally approves the conversion process on behalf of your corporation. The plan will need to detail how ownership will be allocated as the corporation transfers from your original state to Florida. Shareholders will all need to vote in simple majority to approve conversion.

• Submit Articles of Conversion
  • In your Florida Articles of Conversion, you’ll need to list several pieces of information, including: the business name, type of entity (corporation), State where it first incorporated, date of incorporation, new name of the Florida corporation, effective date, and a signature of a corporate director, officer or incorporator. To file the Florida Articles of Conversion, you will need to submit the Articles of Conversion packet (including a cover letter) either by mail or in person delivery. Florida does not currently offer online filing of conversion documents.

• Submit Articles of Incorporation
  • You must include new Florida Articles of Incorporation for your Florida corporation when you file your Articles of Conversion. The Florida Articles of Conversion packet includes Articles of Incorporation.

• Pay Filing Fees
  • The cost to convert your company to a Florida corporation is $105, to file for Articles of Conversion is $35, and to file for Articles of Incorporation is $70. 

• Dissolve the corporation in your home state
  • Once conversion of your corporation in Florida is completed, you’ll need to dissolve your corporation in its home state or jurisdiction. 

2. Dissolving your business and forming a new Florida Corporation:

Some states do not allow conversion of a corporate entity that was formed elsewhere in the US. Instead, the owner may be required to dissolve the former corporation and establish an entirely different one in the new state. With this option comes additional administrative work, including the need to close bank accounts and apply for a new tax ID number. To form a new corporation, you must file Articles of Incorporation with the Florida Department of State Division of Corporations (along with a filing fee). The articles must include a valid corporate name, which must include a suffix such as “corporation” or “incorporated,” must list the number of authorized shares of stock for your corporation, the address of your corporation’s principal place of business, and the name, address and signature of the incorporator.

3. Keeping your corporation in your home state and registering a Foreign Corporation in Florida: 

Alternatively, you can leave your business in your former state and register it as a foreign corporation in Florida. This allows you to maintain your corporate status in your former state, while also allowing you to transact business in Florida. Functioning as a foreign business entity is usually the quickest way to maintain business continuity in Florida. This option is preferrable if the business has continuing operations in its original state, or the owner ultimately plans to return to the state where the company was established or bequeath it to another of that state’s residents or family members. However, please note that foreign entity status may limit flexibility or create bookkeeping hassles by keeping the company anchored elsewhere.

To register as a foreign corporation, you must file an Application by Foreign Corporation for Authorization to Transact Business in Florida with the Florida Department of State. The form includes information such as the name of your corporation and location of your main office, and it must be accompanied by a filing fee, certificate of existence, or certificate of good standing from your corporation’s home state.

DISCLAIMER

Attorney Erum Siddiqui Kistemaker is the managing shareholder at Kistemaker Business Law Group. Kistemaker Business Law Group is a Boutique law firm with a strong dedication to delivering comprehensive legal counsel to business and corporate entities throughout Florida. Our business lawyers represent entrepreneurs, corporations, green companies, tech companies, as well as buyers and sellers of businesses large and small. Our office is in Ormond Beach, and you can visit our website at https://daytonabusinesslawyers.com/. Please note, the information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Kistemaker Business Law Group or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have any questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisement or this column. 

Please apply ASAP, it is a first come, first serve basis!

For more information go to www.FloridaDEP.gov/hurricane.

The Florida Hurricane Restoration Reimbursement Grant Program addresses coastal beach erosion incurred as a result of preparation for or damage sustained from Hurricane Ian or Hurricane Nicole after Sept. 23, 2022. It provides reimbursement per eligible project to eligible applicants who own an eligible residential property as referenced in Rule 62ER23-2, F.A.C.

Form 1 DEP-62ER23-2: Hurricane Restoration Reimbursement Grant Program Application 

Form 2 DEP-62ER23-2: Grant Terms and Conditions

Form 3 DEP-62ER23-2: Hurricane Restoration Reimbursement Grant Program Attestation of Low-Income or Moderate-Income

The department encourages the submittal of applications through its online portal.

To submit an application online, you must first create a DEP Grants User account and Login to view the application.

For more information go to www.FloridaDEP.gov/hurricane.