real estate

Do you need a Lady Bird Deed?

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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.  However, these deeds are outdated!

In Texas you do not need a Lady Bird Deed because the Texas Legislature created a Transfer on Death deed with a new law.  This new law allows property to transfer at death to someone else, so no probate is needed.  A Transfer on Death deed conveys property outside of probate. Avoiding probate allows for you to avoid court costs and administrative costs to deed the property to your beneficiary. Under current Texas law, it also excludes the real property from Medicaid estate recovery.

The Transfer on Death deed can only transfer real property (ie home, commercial property, etc) and the deed must be formal in all ways and filed with the local real property records office.  Anyone can sign a Transfer on Death deed but they must have the capacity to understand what they are doing or the deed could be found to be invalid.  You should consider retaining an attorney to prepare this deed as the cost would not be large.

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