What Are the Disadvantages of a Lady Bird Deed in Florida?

A Lady Bird deed avoids probate and can protect a Florida home from Medicaid estate recovery after death. Those are real benefits. But a Lady Bird deed also comes with a set of significant disadvantages that most families — and even some attorneys — never fully explain. Here is an honest look at the risks.

1. Every Beneficiary and Their Spouse Must Sign to Sell

Under Florida law, it takes both spouses to sell or transfer real property — regardless of whose name is on the deed. When your home transfers to your children through a Lady Bird deed, every child and their spouse must sign off before the property can be sold, refinanced, or transferred.

If you have four children and they are all married, that is potentially eight signatures required. All it takes is one difficult situation — a divorce, a disagreement, an estranged relationship — and the entire process can be held up indefinitely.

2. No Protection If a Beneficiary Is Going Through a Divorce

A Lady Bird deed transfers the home outright to whoever is named. If a beneficiary is going through a divorce at the time you pass away, their soon-to-be ex-spouse may have a legal interest in the inherited property. The family may be unable to sell or transfer the home until that divorce is resolved — while continuing to pay property taxes, insurance, and other carrying costs.

A properly drafted trust with protective provisions can shield a child's entire inheritance from divorce and creditor claims. A Lady Bird deed cannot.

3. A Potential Insurance Gap After Death

When a property owner dies, the Lady Bird deed does not transfer the home instantly. The beneficiaries must file paperwork with the county — a death certificate and an affidavit — to complete the transfer. During that gap, there is a question about who has insurable interest in the property.

A federal appellate court — the Eighth Circuit — addressed this directly in Strope-Robinson v. State Farm (2021), where an insurance company successfully denied a fire damage claim during exactly this type of gap period. Florida is not in the Eighth Circuit, but insurance defense attorneys are aware of this case. Until Florida addresses this by statute, this is an unresolved risk — particularly relevant after a hurricane damages a home during the transfer period.

4. No Coverage for Out-of-State Property

A Lady Bird deed only covers Florida property. If you own a home in Minnesota, Michigan, Wisconsin, or any other state, that property must be handled separately — and it will likely go through probate in that state unless other planning is in place. A revocable trust can hold property in multiple states under one document.

5. A Deceased Beneficiary Can Create a Probate Nightmare

If a beneficiary named on the Lady Bird deed passes away before or around the same time as the grantor, completing the transfer can become extremely complicated. Courts may require a probate proceeding for the deceased beneficiary's estate before the property can be transferred or sold — even to buyers who have already closed on the property.

6. FL Homestead Complexity

Florida's constitutional homestead laws interact with Lady Bird deeds in ways that can produce unintended results — particularly for married couples. Courts in other states have already ruled against families who found that a joint Lady Bird deed did not operate the way they expected at the first spouse's death. Florida's homestead laws create their own version of this complexity.

The Bottom Line

A Lady Bird deed is not a bad tool — it is a limited one. For families with uncomplicated situations, it may be adequate. For everyone else, the risks of a Lady Bird deed often outweigh the savings in upfront cost.

To speak with an attorney, call our Florida office at 941-909-4644 or fill out the contact form on this page and a member of our team will reach out to schedule your consultation.