A “Lady Bird Deed” is a nickname given to an Enhanced Life Estate Deed, which is used to convey property to your heirs outside of probate. This deed is commonly used in Texas because it allows the grantor to transfer property to beneficiaries while retaining a life estate in the property coupled with the power to sell, convey, or mortgage the property without the beneficiaries’ consent. The beneficiary of the deed does not get any rights to the property while the current owner is alive.
The Lady Bird Deed’s features include:
- allowing the property owner to retain his homestead creditor and tax exemptions;
- keeping the property owner’s home exempt from Medicaid claims during his lifetime;
- allowing the property owner to pass the property to his heirs outside of probate upon death free of Medicaid claims and liens; and
- allowing the property owner to live in the property, rent the property, or sell the property without the consent of the beneficiaries.
This deed is most helpful because a life estate is created and no trust is necessary. Instead of probating the owner’s estate, the beneficiary only has to file the death certificate in the local county records for the property to be transferred.
For a look at how this deed affects your living spouses homestead right, click HERE!