How to Revoke a Lady Bird deed in Florida

The most effective way to revoke a Florida lady bird deed is to transfer your property to a third party. It is unclear whether you are allowed to transfer the property back to yourself.

The Safest Way to Revoke a Lady Bird Deed

The whole point of a lady bird deed is that you can take back the transaction. This is the big advantage that a lady bird deed has over a normal life estate. It is also why lady bird deeds are called “enhanced life estate deeds.” The enhancement is the ability to revoke the transaction. This revocation can be done without the joinder of the remaindermen.

But how does one actually revoke the lady bird deed? The safest course of action is to transfer the real estate to a third party. Usually, this is just selling the property to someone. Lady bird deeds have the grantor explicitly retain the ability to convey the property to others. And that means you can sell the property without having to pay the old remainder beneficiary a dime. You keep all the proceeds, and the old remainder beneficiary gets only what you feel like giving them.

Can I revoke a lady bird deed without transferring the property to a third party?

The law in Florida is not clear about whether you can revoke a lady bird deed without conveying the property to a third party. Because of this, it may be difficult to find title insurance if you do this.

Lady bird deeds are allowed in Florida because of an old Florida Supreme Court case named Oglesby v. Lee. In that case, the deed allowed the grantor to “resell said lands to other parties. . . .”[1] Thus, we know that the grantor of a lady bird deed can retain the right to resell the property to a new party. However, the case does not address whether the grantor can retain the right to simply revoke the deed without transferring to a third party. Thus, there is no clear case law establishing the right to revoke a lady bird deed without transferring to a third party.

All that being said, if you look at the reasoning in Oglesby, you will see that the key point was the right was reserved by the grantor. The Court was primarily concerned about the right clearly being reserved in the deed, not the specifics of what that right was. Thus, it seems likely that if you reserved the right to revoke the deed without transferring, then you should have the right. For this reason, a good estate planning attorney will draft a lady bird with that right reserved. As long as you clearly reserve the right in the deed, you probably will have the ability to use it down the road.

The problem here is that we have no case law to firmly establish that you can revoke without the third-party conveyance. And without the case law, some title insurance companies are hesitant to insure a deed that has been revoked without a transfer to a third party. In other words, the real problem here is not the law; the problem is getting title insurance. Thankfully, there are also title insurance companies that will insure title on revoked lady bird deeds so long as the grantor clearly reserved the right to revoke the deed. See Fund Title Notes, Standard Commitment Clauses, DD040 Enhanced Life Estates a/k/a Lady Bird Deeds C0901.

If you want to revoke your lady bird deed without selling to a third party and your lady bird deed failed to clearly reserve the right to revoke the deed, then you should ask your attorney to contact your title insurance company and try to work out an acceptable arrangement. There may be some creative legal solution to the problem. For example, your attorney might be able to draft a trust in which you can hold the property. You then deed the property to your trust, which you still control. This would allow you to retain full control of the property while technically deeding it away to a third party. The title insurance company might find this to be an acceptable compromise and continue to insure title. If that is not acceptable to the title insurance company, another creative solution may be available. This is where a good lawyer will think outside the box to find a way to accomplish your goals.

[1] Oglesby v. Lee, 73 Fla. 39, 73 So. 840 (Fla. 1917).