Adding a name to deed vs lady bird deed in order to avoid probate on your home

Ricky: I want to finally add my brother's name to the deed to the house. We went with a quitclaim deed to add my name to the house years ago with my mother's name. Now I'm in sole possession. I went around the corner to the paralegal office and they offer quitclaim deeds, but after listening to you all these many years, I know you like Lady Bird deeds. I'm just wondering if you want to differentiate for me and what I should prefer.

Attorney Tom Olsen: Ricky, does your brother live there with you?

Ricky: My brother lives three houses down the street.

Tom: Okay. First of all, if you do this quitclaim deed, Ricky, it is written in stone. If a year from now you change your mind or you wanted to sell the property or refinance the property, you would not be able to do so without your brother's knowledge, signature, and consent. Number two, depending on how that quitclaim is done, you may lose one-half of your homestead exemption, that homestead exemption saves you on real estate taxes. Number three, if you do that deed, you may cost your brother a lot more money in capital gains taxes down the road when you pass away and he inherits it.

If you do a Lady Bird deed, well, number one, you retain complete control over it. If you do a Lady Bird deed to your brother, six months from now you change your mind and want to sell it, you can do it without your brother's knowledge, signature, and consent. If you do a Lady Bird deed, you'll continue to get a 100% homestead exemption for real estate tax savings purposes.

Number three, if you do a Lady Bird deed and you pass away, your brother will get a step-up basis for capital gains tax purposes, so if he turns around and sells it, he'll pay no capital gains taxes on the sale of that property. Hey, Ricky, I just gave you three very good reasons to not do what you're doing and do a Lady Bird deed. What are you going to do?

Ricky: Oh my gosh, you made it so crystal clear. Tom, every other week I change my mind about whether I want to leave the house with my brother or not, so no sooner do I get his name on the deed, next week I'll probably change my mind.

Tom: Well, there's my reason number one, and that reason alone is good enough for you, Ricky, so Lady Bird Deed is a way to proceed here. We'd be pleased--

Ricky: Tom, tell me this then, why would the paralegal office not offer a Lady Bird deed to me?

Tom: If you go to a lot of lawyers in Florida and say you had like a Lady Bird deed to avoid probate on my real estate, they're going to say, "What are you talking about? I don't know what a Lady Bird deed is," so they don't even know what a Lady Bird deed is, Ricky, much less a paralegal. I'd suggest that's the reason why.

[00:02:43] [END OF AUDIO]