Pros and Cons of using Ladybird Deed vs Probate

Guest 0.10 Dollars($)

I live in Florida and need a few questions answered about the "Ladybird" deed. PLEASE! My sister wants my Dad to do one of these deed's. There are 4 of us, that she wants to put on it. I want to know, what are the basic Pro's and Con's to this are verus' Probate. What are the gift taxes I heard about. What happens if it does go to probate? What happens if someone does not want to do this? Can it be done, anyway? I would appreciate any help you can give me. I just want what is best for my Dad. Thanks

miller_st · Joined: 17 Jan 2007 Posts: 917 168.82 Dollars($)

Lady bird deed is commonly used to avoid probate procedure and the cost involved with it.

Your dad would be able to retain a life estate on his property with rights to sell. He will also be able to revoke the deed any time he wishes to.

If something happens to your dad then property ownership will get transferred to grantees named on the deed without the need for a probate.

Kindly go through the following page to know more about this type of deed & its use: http://www.mortgagefit.com/know-how/ladybirddeed.html

Miller

Niicss · Joined: 03 Oct 2005 Posts: 1047 156.15 Dollars($)

"What happens if someone does not want to do this?"

No body can force you dad to make this deed.

If you dad does not make this deed then he can also make a will for transfer of his property after his death. In that case the will would go through the probate procedure before his estate is divided among the beneficiaries name on the will.

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi Hoodles,

A ladybird deed is also known as 'enhanced life estate deed'. By this type of deed, the owner of a property can avoid probate of his home and he has also the right to sell or give away his property without anybody's consent. This type of deed does not end up in capital gains for the beneficiaries as they will not get anything till the property owner pass away. Moreover, there is no gift tax associated with this type of deed.

Guest 0.10 Dollars($)

"What are the gift taxes I heard about."

Suppose you have a house which you give to your son. The value of the house is $70,000 but you take only $25000 as consideration. Value received here is less than actual value so it will be called as a gift and applicable gift taxes will have to be paid. But there is gift tax exemption available, and if the value of gift is within the allowed exemption then no gift tax will have to be paid.

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi Hoodles,

There are certain gift taxes associated with Ladybird Deed. To know about them, you may refer to http://www.mortgagefit.com/gift.html#exemption

Guest 0.10 Dollars($)

My mom did a lady bird and left the house to my sister and I. Her daughter is living in the house and my sister wants her to stay there.
What recourse do I have - the realestate broker said it needs to be empty in order for it to sell. Please advise

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi Marmmy,

Welcome to the forum.

You are saying that according to the ladybird deed, that your mother had made, you and your sister are the owner of the house. So you can take possession of that property.

Now are you just want that your sister can stay in that house instead of her daughter or you want your share of the property as you are also the owner of that property?

Best of luck,
Larry

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