Was a Lady Bird deed for mortgaged Florida property subject to documentary stamp tax when the life tenants retained complete control?

Plain-English summary

Florida found no documentary stamp tax due on the reviewed enhanced life estate deed, commonly called a Lady Bird deed.

The deed covered Florida property encumbered by a mortgage. But the life tenants retained full power to sell, convey, mortgage, lease, gift, or otherwise dispose of the property, keep the proceeds, and divest the named remainderperson without that person's consent.

The Department concluded that the remainder interest was contingent on the life tenants' deaths and that no present beneficial interest transferred. Without a present transfer, the deed was not taxable regardless of consideration, including the existing mortgage.

What this means for you

Property owners and estate planners

The holding rests on the deed's retained-control language. A differently drafted life estate deed may produce a different result.

Closing and recording teams

An existing mortgage normally can count as consideration, but it did not create tax here because the document transferred no present beneficial interest.

Common questions

Was documentary stamp tax due? No.

Did the mortgage change the result? No.

Why not? The life tenants retained all present rights, while the remainderperson's interest remained contingent.

Citations and references

• Fla. Stat. Sec. 201.02(1)(a)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 20B4-003

Original ruling text

Technical Assistance Advisement
Page 1

TAX: Documentary Stamp Tax
TAA NUMBER: 20B4-003
ISSUE: Whether documentary stamp tax is due on an Enhanced Life Estate Deed
STATUTE CITE(S): Sections 201.02(1)(a), Florida Statutes
QUESTION: Is an Enhanced Life Estate Deed, also known as a Lady Bird Deed subject to
documentary stamp tax?
ANSWER: An Enhanced Life Estate Deed, also known as a Lady Bird Deed, does not transfer any
present beneficial interests in real property. In the present case, the Life Tenants retain all
rights to the subject properties. The remainderpersons’ interests, if any, is contingent upon the
death of the Life Tenants. Since there is no present transfer of beneficial interests in the subject
properties, the Deed is not subject to documentary stamp tax regardless of any consideration.

October 16, 2020

XXX
XXX
XXX
XXX
Re: Technical Assistance Advisement No. – 20B4-003
Documentary Stamp Tax
Chapter 201, Florida Statutes (F.S.)
Dear XXX:
This is in response to your request dated May 12, 2020, for a Technical Assistance Advisement
(TAA) pursuant to s. 213.22, F.S., and Rule Chapter 12-11, Florida Administrative Code (F.A.C.),
concerning the imposition of documentary stamp tax on Enhanced Life Estate Deeds, which are
commonly referred to as “Lady Bird Deeds”. An examination of your letter has established that
you have complied with the statutory and regulatory requirements for issuance of a TAA.
Therefore, the Department is hereby granting your request for a TAA.
FACTS AS PRESENTED BY PRACTITIONER
A warranty deed (“Deed”) was executed on XXX, by XXX, also known as XXX, and XXX
(“Grantors”), and it was recorded XXX, in Clay County OR Book XXX, Page XXX. The Florida real
property purportedly transferred by Deed was encumbered by a mortgage for $XXX.

Technical Assistance Advisement
Page 2

Deed contains language where (the “Life Tenants”) reserve and retain “a LIFE ESTATE with full
power and authority to grant, sell, convey, reconvey, mortgage, encumber, lease, renounce,
divest, transfer, assign, gift, hypothecate or otherwise dispose of the caption property, in fee
simple, with or without consideration, without joinder of any Remainderperson, with full power
and authority to retain any and all proceeds therefrom, without any liability to any
Remainderperson for waste; reserving and retaining full power and authority for the Life Tenant
to divest any Remainderperson of their Remainder Interest and to reconvey the Remainder
Interest to the Life Tenant, and/or to any successor Remainderperson, with or
without consideration, and without joinder of any Remainderperson; and upon the death of the
last surviving Life Tenant, the REMAINDER INTEREST, if any…” to the named remainderpersons.
Per the Deed, the Remainderperson is the Grantors’ daughter.

REQUESTED RULING
You are requesting a ruling as to whether Deed is subject to documentary stamp tax.
LAW AND DISCUSSION
Section 201.02(1)(a), Florida Statutes (F.S.), provides that on deeds, instruments, or writings
whereby any lands, tenements, or other real property, or any interest therein, shall be granted,
assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or any other
person by his or her direction, on each $100.00 of the consideration therefor the tax shall be
$0.70 ($0.60 in Miami-Dade County). When the full amount of the consideration for the
execution, assignment, transfer, or conveyance is not shown in the face of such deed,
instrument, document, or writing, the tax shall be at the rate of $0.70 ($0.60 in Miami-Dade
County) for each $100.00 or fractional part thereof of the consideration therefor. For purposes
of this section, consideration includes, but is not limited to, the money paid or agreed to be
paid; the discharge of an obligation; and the amount of any mortgage, purchase money
mortgage lien, or other encumbrance, whether or not the underlying indebtedness is assumed.
If the consideration paid or given in exchange for real property or any interest therein includes
property other than money, it is presumed that the consideration is equal to the fair market
value of the real property or interest therein.
DEPARTMENT’S POSITION
Florida’s documentary stamp tax is an excise tax on documents that transfer an interest in
Florida real property. The tax is based on the consideration given for the property interest
transferred, and consideration would include any mortgages encumbering the property when it
is transferred.
An Enhanced Life Estate Deed, also known as a Lady Bird Deed, does not transfer any present
beneficial interests in real property. In the present case, the Life Tenants retain all rights to the
subject properties. The remainderpersons’ interests, if any, is contingent upon the death of the
Life Tenants. Since there is no present transfer of beneficial interests in the subject properties,
Deed is not subject to documentary stamp tax regardless of any consideration.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is

Technical Assistance Advisement
Page 3

binding on the Department only under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is predicated on those facts and the
specific situation summarized above. You are advised that subsequent statutory or
administrative rule changes, or judicial interpretations of the statutes or rules, upon which this
advice is based, may subject similar future transactions to a different treatment than expressed
in this response.
You are further advised that this response, your request, and related documents are public
records under Chapter 119, F.S., which are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Your name, address, and any other details, which might lead to
identification of the taxpayer, must be deleted before disclosure.
In an effort to protect the confidentiality of such information, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, backup
material, and response within fifteen days of the date of this advisement.
Sincerely,

Roger L. Beasley
Roger L. Beasley
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 717-6488
Record ID: XXX