Texas Lady Bird Deed

For many people, real property is among their most valuable assets. Because of this, real estate should be a key part of any estate planning strategy. Whether someone owns only a primary home or a broad real estate portfolio, decisions about that property can significantly impact their beneficiaries. One estate planning option with notable benefits is the Lady Bird Deed.

What Is It?

A Lady Bird Deed—sometimes called an “Enhanced Life Estate Deed”—allows the owner to keep the right to use, occupy, or control the property for life, but names a beneficiary to automatically receive the property upon the owner’s death. For example, if a person named Maria signs a life estate deed to transfer her home to her daughter Marielle, Marielle becomes the legal owner, but Maria keeps the right to live in the property until her death. With a standard life estate deed, Maria cannot change her mind and reclaim ownership later.

A Lady Bird Deed addresses this limitation. The grantor (original owner) keeps the right to revoke or modify the deed at any time during their lifetime. Using a Ladybird Deed, Maria could transfer her home to Marielle but retain the right to cancel or change the transfer at any time for any reason. This flexibility leads many people to choose Lady Bird Deeds for estate planning.

Advantages

Lady Bird Deeds offer several advantages:

• Avoids probate. Property passes to the named beneficiary outside of probate, so heirs do not have to wait for the probate process to conclude before taking title.
• Minimizes tax liability. The transfer is not a completed gift until the owner’s death, so no gift tax return is needed at creation. The property is also revalued at the owner’s death for capital gains tax purposes, which may reduce taxable gains if the beneficiary sells.
• Preserves Medicaid eligibility. Because the transfer is revocable, it does not count as a disqualifying gift under Medicaid rules. This allows the owner to maintain eligibility for Medicaid long-term care. It also protects the property from Medicaid estate recovery after death.
• Maintains Homestead Protections: Texas law allows the property to keep its homestead status and exemptions.
• Retains Owner Control: The owner can sell, mortgage, or change the property details during their life without consent from the beneficiary.

Contact J Nichols Law, PLLC Today to Discuss Whether a Lady Bird Deed is Right for You

While a Lady Bird Deed presents many advantages, it may not be the best solution for every estate plan. To discuss how it could serve your estate planning goals, call us today at 409-257-7878 or contact us online to schedule a consultation.