Should I Use a Lady Bird Deed or Trust for Estate Planning in Palm Beach County?

Statistics show that home equity is a major source of wealth for the average American family. The question for many of these families is simple: How do they pass on this wealth to their loved ones in the most efficient way? Lady bird deeds and trusts represent two valid options. But which is better? Consider answering this question with help from an experienced estate planning attorney in Palm Beach County.

Lady Bird Deeds Are Relatively Straightforward

A lady bird deed allows you to give your loved one the “right of survivorship” to your family home. This means after you (and perhaps your spouse) pass away, your chosen beneficiary will inherit the home automatically without having to go through probate. Lady bird deeds are popular because they give you total control over your home despite the fact that your chosen beneficiary has technically become a co-owner of the property while you’re still alive.

If you’re aiming for a simple solution, a lady bird deed will probably be an attractive option. With this approach, you’ll create a relatively straightforward document and sign it. This option is also relatively affordable, allowing you to protect your loved one’s inheritance without sacrificing your own assets in exchange.

Trusts Offer Greater Control and Flexibility

In contrast, trusts are less affordable. They are also more complicated to set up, and you’ll need to devote more of your wealth toward legal fees in order to establish a trust. However, trusts are much more flexible than lady bird deeds, and they give you more control.

A Trust also helps you avoid probate, and your beneficiaries can inherit the property immediately after your passing. However, revocable living trusts in particular give you the option to make amendments if necessary. You can also use a trust for much more than just your property, potentially including a range of other assets that might also be subject to probate.

Another reason to consider a trust is its asset protection qualities. As long as the home remains in the trust, it gains protection from creditors. That said, your beneficiaries might gain the same level of protection from the homestead exemption, assuming they use your home as their primary residence after inheriting it. With a trust, you can also create more contingencies if things don’t go to plan.

It Depends on Your Unique Circumstances

At the end of the day, the best option probably depends on your unique circumstances. This is why you may want to consider discussing your situation with a lawyer to determine how to proceed. Aside from trusts and lady bird deeds, there may be other options that you have not yet considered.

Can a Palm Beach County Estate Planning Lawyer Help Me?

If you’re trying to decide between a lady bird deed and a trust when passing on your home to the next generation, consider speaking with a Palm Beach County estate planning lawyer. These legal professionals can assess your unique circumstances and determine which option might make the most sense for you. Consider expanding on this conversation by scheduling a consultation with Kitroser Lewis & Mighdoll today.

Sources: 

floridabar.org/the-florida-bar-journal/lady-bird-deeds/

floridabar.org/public/consumer/pamphlet028/