Ladybird Deed
Posted date : Jul 16, 2024.
In the spring 2024 issue, you mention a ‘Ladybird Deed’ for properties in Florida. Can the names of our adult children be added to the deed at any time without triggering capital gains tax, or did this ‘Ladybird Deed’ have to be put in place at the time of our original purchase? When searching online, other questions arose. Is it true that, upon our deaths, the property’s value for tax purposes receives a ‘stepped-up basis’ to fair market value that will be used as the cost base for our children?
Susan Fritz
Tecumseh, ON
Ed.: The names can be added at any time. However one needs to be concerned about gift taxes upon doing so. There are ways of avoiding the gift taxes, such that you should consult an attorney if you wish to add the children and avoid the gift taxes. As for the ‘stepped-up basis’ – if the property is part of an estate and thus inherited through a will, this would apply. However, if the property passes to a person by way of joint tenancy, the property is not part of the estate of the deceased. The ideal way to accomplish your objectives is to have the property in a trust.
