Life Estate DEEDs Texas
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texas Life Estate Deed
A Texas Life Estate Deed transfers title of real property into two different interests. The two interests become the owners of the property. Both interests hold title at the same time. However, each of the interests have separate rights of possession. The interests created by this deed are:
1. The Life Estate Interest. This interest is call the “Life Tenant”
2. The Remainderman Interest. This interest is simply called the “Remainderman”
Note: One benefit of transferring a house with a Life Estate Property Deed may be to avoid the cost of probate.
Good to know: Once a Life Estate Deed is created and filed, both the Life Tenant and the Remainderman must agree if changes are to be made to the ownership of the property.
On the other hand, an Enhanced Life Estate Deed allows the Life Tenant to make changes at any time without the consent on the Remainderman. This deed is also known as a Lady Bird Deed.
The information provided is not intended as tax advice. Please consult a CPA or a tax advisor for tax questions.
Note: When a Life Tenant passes away, it is recommended that you file an Affidavit of Death in the property records to confirm the death of the Life Tenant named in a Life Estate Deed.
Life Estate Deeds
There are basically two types of Life Estate Deeds: a Deed retaining a Life Estate and a Deed transferring a Life Estate.
The most common Deeds retaining a Life Estate are the Traditional Life Estate Deeds and the Lady Bird Deeds aka the Enhanced Life Estate Deeds.
Whether the Life Estate is retained or transferred, the creation of the Life Estate removes the property from the Life Tenant’s estate and transfers the property to the Remainderman upon the death of the Life Tenant. This eliminates the property from probate.
Both interests hold title at the same time. The Life Tenant has current possession. The Remainderman gains possession when the Life Tenant dies.
Good to know: A common use of a Deed transferring a Life Estate is to transfer the property to a parent to reduce property taxes. While the parent is alive the parent may be eligible for homestead, over 65 and other property tax exemptions.
Traditional Life Estate Deed vs Lady Bird Deed aka Enhanced Life Estate Deed
The major difference between a traditional Life Estate Deed and the Lady Bird Deed aka Enhanced Life Estate is the right of the Life Tenant to revoke the Life Estate Deed and remove the Remainderman up to the time of the death of the Life Tenant.
Good to know: A title company or a buyer MAY still require the Remainderman to sign off of the sale to avoid any future problems with the Remainderman, even with a Lady Bird Deed.
With a Life Estate, while the Life Tenant is alive, they may relinquish their own interest in the property to the Remainderman. But may not transfer or sell it to a third party.
If they chooses to relinquish their interest in the property, they may use a deed to do so. The deed will need to include a legal description of the real property and should be filed with the county clerk.
After a Life Tenant dies, the Remainderman may need a copy of the Life Tenant’s death certificate or some other proof of death, such as an Affidavit of Death which can be filed with the County Clerk.
Upon the death of the Life Tenant, the Remainderman owns complete title to the real property.
How to remove someone from a life estate
Once the Life Estate Deed is signed by the Grantor and recorded in the County Clerk’s office, it cannot be changed without the written permission of both the Life Tenant and the Remainderman, unless it is a Lady Bird Deed aka an Enhanced Life Estate Deed.
With a traditional Life Estate Deed, the written consent of both parties, the Life Tenant and the Remainderman, is required if the property is to be sold or financed during the lifetime of the Life Tenant. This requirement ends on the death of the Life Tenant.
If the Life Tenant agrees to remove the Life Estate, the Life Tenant can simply sign a Warranty Deed transferring their interest in the property to the Remainderman. This removes the Life Estate.
Good to know: If the Remainderman sells the property, the Life Tenant’s right to continue to use the property for life remains with the property unless the Life Tenant agrees to remove the Life Estate.
Residential Real Estate Law
At Texas Property Deeds, your Life Estate Deed will be prepared by a Texas licensed attorney board certified by the Texas Board of Legal Specialization in Residential Real Estate Law.
With over 30 years experience in real estate law, we make sure your document will be prepared correctly.
Good to know: We do not advise using a “fill-in-the-blank” Texas Life Estate Deed form as unintended mistakes may be difficult to correct once this deed is filed.
Note: If you anticipate that you would like to create a Life Estate Deed, it is advisable to do so sooner rather than later.
LIfe Estate Deed prepared for $245
Do you have questions about a Life Estate 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.
