Understanding Lady Bird Deeds in Texas: A Complete Guide

A Lady Bird Deed, also known as an Enhanced Life Estate Deed, is a type of deed that allows a person to retain ownership of their property while also designating a beneficiary who will receive the property after their death. Lady Bird Deeds are named after former First Lady Claudia Alta “Lady Bird” Johnson, who used this type of deed to transfer ownership of her Texas ranch to her daughter. Here is a detailed overview of how Lady Bird Deeds work in Texas:

What is a Lady Bird Deed? A Lady Bird Deed is a legal document that allows a person (the grantor) to retain ownership of their property while also designating a beneficiary (the remainderman) who will receive the property after the grantor’s death. The grantor retains the right to use and occupy the property, sell the property, or give the property away during their lifetime. However, after the grantor’s death, the property is transferred to the remainderman according to the terms of the Lady Bird Deed.
How is a Lady Bird Deed created? In Texas, a Lady Bird Deed is created by completing a Lady Bird Deed form and having it signed and notarized. The form must be completed in accordance with the requirements set forth in Texas Property Code Section 112.051.
Who can be a grantor on a Lady Bird Deed? Any person who owns real property in Texas can be a grantor on a Lady Bird Deed. The grantor must be competent and have the legal capacity to execute a deed.
Who can be a remainderman on a Lady Bird Deed? Any person or entity (such as a trust or a charitable organization) can be a remainderman on a Lady Bird Deed. The remainderman must be identified by name on the Lady Bird Deed form.
Can a Lady Bird Deed be revoked? A Lady Bird Deed can be revoked by the grantor at any time before their death. The grantor can revoke the Lady Bird Deed by executing a new deed or by destroying the original Lady Bird Deed.

How does a Lady Bird Deed affect a grantor’s estate? A Lady Bird Deed does not affect the grantor’s estate while they are alive. The grantor retains full ownership and control of the property and cansell, mortgage, or transfer the property at any time. After the grantor’s death, the property is transferred to the remainderman according to the terms of the Lady Bird Deed.

How does a Lady Bird Deed affect a grantor’s will? A Lady Bird Deed takes precedence over a will in Texas. If a person has a Lady Bird Deed in place, the property will be transferred to the remainderman specified on the Lady Bird Deed, regardless of any provisions in the person’s will.
What are the advantages of a Lady Bird Deed? There are several advantages to using a Lady Bird Deed for estate planning in Texas:

Lady Bird Deeds are easy to create: A Lady Bird Deed can be created by completing a simple form and having it signed and notarized. This is a much simpler process than creating a will or trust.
Lady Bird Deeds are flexible: A Lady Bird Deed allows a person to change the remainderman at any time before their death. This allows a person to update their estate plan as their circumstances change.
Lady Bird Deeds avoid probate: Probate is the legal process of distributing a person’s assets after their death. Probate can be time-consuming and expensive, and it is a matter of public record. A Lady Bird Deed avoids probate because the property is transferred directly to the remainderman after the grantor’s death.
Lady Bird Deeds provide a way for a grantor to retain control of their property: A Lady Bird Deed allows a grantor to retain the right to use and occupy their property, sell their property, or give their property away during their lifetime. This can be a useful option for people who want to maintain control of their property while also ensuring that it will be transferred to their chosen beneficiary after their death.

What are the disadvantages of a Lady Bird Deed? There are a few potential disadvantages to using a Lady Bird Deed for estate planning in Texas:

Lady Bird Deeds may not cover all assets: A Lady Bird Deed only applies to real property, such as a person’s home or land. It does not apply to personal property, such as bank accounts, stocks, and other assets. A person who wants to transfer all of their assets after their death will need to use other estate planning tools, such as a will or trust.

Lady Bird Deeds may not provide enough control: A Lady Bird Deed allows a person to specify a remainderman who will receive their property after their death, but it does not allow them to specify any conditions or restrictions on the transfer. If a person wants to specify how their property should be used or managed after their death, they may need to use other estate planning tools.

Lady Bird Deeds may not protect against creditors: A Lady Bird Deed does not provide any protection against creditors. If a person has creditors who may make claims against their estate after their death, a Lady Bird Deed may not be sufficient to protect their assets.

How do I create a Lady Bird Deed in Texas? To create a Lady Bird Deed in Texas, a person will need to:

Obtain a Lady Bird Deed form: A Lady Bird Deed form can be obtained from the Texas Real Estate Commission or from a real estate attorney.
Complete the form: The Lady Bird Deed form must be completed in accordance with the requirements set forth in Texas Property Code Section 112.051. This includes providing the name and address of the grantor, the name and address of the remainderman, and a description of the property being transferred.
Have the form signed and notarized: The Lady Bird Deed form must be signed and notarized by the grantor in the presence of a notary public.
Record the deed: The Lady Bird Deed must be recorded with the county clerk in the county where the property is located. This will create a public record of the deed and ensure that it is enforceable.

Can a Lady Bird Deed be challenged? A Lady Bird Deed can be challenged in court if it is determined that the grantor did not have the capacity to execute the deed, if the deed was obtained through fraud or duress, or if the deed is not in compliance with the requirements of Texas Property Code Section 112.051.
What is the process for transferring property using a Lady Bird Deed? The process for transferring property using a Lady Bird Deed is as follows:

The grantor executes the Lady Bird Deed: The grantor completes the Lady Bird Deed form and has it signed and notarized.
The grantor records the deed: The grantor records the Lady Bird Deed with the county clerk in the county where the property is located.
The grantor dies: The Lady Bird Deed does not take effect until the grantor’s death.
The remainderman takes possession of the property: After the grantor’s death, the remainderman can take possession of the property by presenting a copy of the recorded Lady Bird Deed to the county clerk.

Are Lady Bird Deeds recognized in other states? Lady Bird Deeds are recognized in several states, including Texas. However, the laws and requirements for Lady Bird Deeds vary by state. If a person owns property in multiple states, they may need to create separate Lady Bird Deeds for each state in order to ensure that their property is transferred according to their wishes after their death.

In conclusion, a Lady Bird Deed, also known as an Enhanced Life Estate Deed, is a legal document that allows a person to retain ownership of their property while also designating a beneficiary who will receive the property after their death. Lady Bird Deeds are easy to create, flexible, and avoid probate, but they may not cover all assets, provide enough control, or protect against creditors. A Lady Bird Deed can be created by completing a Lady Bird Deed form, having it signed and notarized, and recording it with the county clerk. Lady Bird Deeds can be challenged in court if they are determined to be invalid, so it is important to consult with a qualified attorney to see if the Lady Bird Deed is right for you.