Lady Bird Deeds Texas

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What is a Lady Bird Deed

A Lady Bird Deed is one of the deeds that may be used in Texas for estate planning and asset protection.

If you own real estate property in Texas, using a Lady Bird Deed enables you to transfer your property upon your death while avoiding the expense and delay of Probate.

This deed is often used in conjunction with qualifying for Medicaid benefits. Consult a Medicaid advisor to see if a Lady Bird Deed is the right option for your specific needs.

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Texas Enhanced Life Estate Deed

An Enhanced Life Estate Deed is another name for a Lady Bird Deed. Like a traditional Life Estate Deed, an Enhanced Life Estate Deed also creates a Life Estate. However, with the Enhanced Life Estate Deed the Grantor retains more, or enhanced, rights including the right to sell or mortgage the property.

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Benefits of a Texas Lady Bird Deed

  • Avoid Probate: A Texas Lady Bird Deed allows your beneficiaries to bypass Probate by transferring your property to a designated beneficiary, the “Remainderman”, upon your death. Since the property transfers automatically to the Remainderman upon the death of the Life Tenant, the transfer does not require Probate.
  • Retain Control: Unlike a traditional Life Estate Deed, a Lady Bird Deed gives the Life Tenant complete control of the property. The Life Tenant maintains the right to use the property in any legal way they chose during their lifetime. This includes the right to sell or mortgage the property without the consent of the Remainderman. If there is currently a mortgage on the property, confirm with your lender that the Lady Bird Deed will not trigger the ability to call the note.
  • Flexible Beneficiary Designation: As the Life Tenant, you can change the Remainderman anytime without requiring approval from the original beneficiary. You can name as many beneficiaries as you want to name. If a beneficiary dies before you do, you can name a new beneficiary or the property will simply pass to your heirs.
  • Medicaid: A Lady Bird Deed may provide some benefits under the current Medicaid laws for the Remainderman. Contact your Medicaid advisor to see if a Lady Bird Deed is a good option for you.
  • Property Tax Exemptions: A Lady Bird Deed allows property owners to keep their current property tax exemptions which can be a substantial benefit.

Differences Between Life Estate Deeds and Lady Bird Deeds

A traditional Texas Life Estate Deed is either a General or Special Warranty Deed that transfers the future ownership of the property to a Grantee but reserves the right of the present ownership of the property to the Grantor for the rest of Grantor’s life.

Note: The Grantor keeps an interest in the property known as a Life Estate. The Grantee receives what is known as the Remainder Interest.

With a Life Estate Deed, the Grantor/Life Tenant does not have the right to sell or mortgage property without the consent, referred to as joinder, of the Remainderman. Both parties need to act together. They must be joined in the decisions.

On the other hand, with a Lady Bird Deed, also known as an Enhanced Life Estate Deed, the Grantor retains a Life Estate and additional rights. These include the right to sell or mortgage the property, and the right to cancel the Lady Bird Deed without the knowledge, consent or joinder of the Remainderman. Beware though; a title company, lender or buyer may still require the joinder of the Remainderman to avoid possible future claims.

Note: As control of a property is retained by the Life Tenant, a Lady Bird Deed transfer may be considered an incomplete gift for tax purposes. Keep in mind, though, that the information provided on this website is not intended as tax advice. Please consult a CPA or other tax advisor for tax questions.

Lady Bird Deed Terminology

  • The Grantor is known as the Life Tenant.
  • The Grantor names a beneficiary who becomes the Remainderman.
  • The Remainderman is the Grantee.
  • This deed creates a Life Estate for the Life Tenant.

Simply put, the owner who signs a Ladybird Deed transfers the real property to the Remainderman and retains a Life Estate for themselves and becomes known as a ‘Life Tenant’.

Good to know: As Grantor, you can name one or more people, entities, organizations or Trusts as the Grantee/Remainderman.

When a Life Tenant dies, the Life Estate ends and the Remainderman owns the property without the need for Probate.

Note: The Remainderman will need to provide proof of death of the Life Tenant before the property can be sold or financed. An Affidavit of Death is sometimes filed in the property records to verify the death of the Life Tenant.

Lady Bird Deed vs Transfer on Death Deed in Texas

With a Lady Bird Deed, you transfer ownership of the property to the beneficiary or beneficiaries of your choice, usually your child or children, and you keep the right to use the property for the rest of your life.

A Lady Bird Deed can be revoked by you at any time before you die or become mentally incapacitated. You also get to maintain all exemptions you may have for the property taxes. No Will or Probate is necessary to transfer the property to your beneficiary.

With a Transfer on Death Deed, you sign a document stating that upon your death, your property is to transfer immediately to the beneficiary or beneficiaries of your choice, usually your child or children.

A Transfer on Death Deed can be revoked by you at any time before you die or become mentally incapacitated. You also get to maintain all exemptions you may have for the property taxes. No Will or Probate is necessary to transfer the property to your beneficiary.

Many people prefer the Lady Bird Deed when they are receiving Medicaid so that the property may not be subject to a Medicaid lien after death.

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Good to know: Other deeds that you might consider for estate planning purposes are:

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Do you have questions about a Lady Bird Deed? Email attorney Scott Steinbach directly at scott@texaspropertydeeds.com.

R. Scott Steinbach is licensed in the state of Texas.  Board Certified by the Texas Board of Legal Specialization in Residential Real Estate Law. AV Preeminent rated by Martindale-Hubble. Peer rated for Highest Level of Professional Excellence.

Texas Property Deeds is a service of The Steinbach Law Firm.  

The Steinbach Law Firm is a Texas Real Estate Law Firm. We prepare all documents for any real estate transaction in Texas.

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