Leaving Florida Property to Heirs
Do you have Florida property you want to leave to your heirs? The Florida estate planning and elder law attorneys of The Karp Law Firm can discuss the best methods for transferring the property, from ladybird deeds, to joint ownership, to transferring the property outright, Each transfer method has its own legal, financial and even psychological advantages and disadvantages. Here is a brief summary of various transfer methods:
Title your home jointly with your children with rights of survivorship.
- Advantage: Your children automatically inherit the home when you die.
- Disadvantage: You will need your children's consent if you wish to sell the house. You will be entitled to half or less of the proceeds depending on the percentage you and your children own respectively.
- Disadvantage: For Medicaid purposes, this may be considered a gift and therefore create a period of ineligibility for benefits.
Deed your home to your children, reserving a life estate for yourself.
- Advantage: Your children own the home when you die.
- Disadvantage: You will need your children's consent if you want to sell the house. You will be entitled to a minor percentage of the proceeds, based on the value of your life estate.
Disadvantage: For Medicaid purposes, this may be considered a gift and create a period of ineligibility for benefits.
Place the house in an enhanced deed (also known as a lady bird deed), retaining the home for the rest of your life, with you having full rights to sell it or give it away while you're alive.
Advantage: The children automatically inherit the home at your death.
Disadvantage: This arrangement may not be acceptable to some lenders and title insurance companies. This could make it difficult to sell or refinance the home.
Place the home in a revocable living trust.
- Advantage: You control the property during your lifetime, and it passes on to the children after you die.
- Disadvantage: Refinancing your home can be difficult.
Gift your house outright to your children.
Advantage: You and the children may be pleased to know that you have given your home to them with "no strings attached."
Disadvantage: You lose control of the property. Your children can do whatever they want with the house - including selling it - without your consent.
Disadvantage: You lose your Florida homestead exemption.
Disadvantage: If your children sell the property while you're alive, they will pay capital gains tax even though you would otherwise have been entitled to a $250,000 capital gains exclusion for the sale of your primary residence.
- Disadvantage: If you ever apply for Medicaid benefits, you may face a period of ineligibility for benefits since the transfer of the house will be considered a gift.
Advantage: The house will pass to your children when it goes through Florida probate.
- Disadvantage: Florida probate can be time consuming and costly.