A Lady Bird Deed, formally known as an “enhanced life estate deed,” is a powerful estate planning tool available in Texas that offers significant advantages for those seeking to protect assets, streamline property transfers, and avoid costly probate proceedings. It is particularly beneficial for homeowners aiming to preserve their homestead while retaining full control during their lifetime.
Read on for more details.
Asset Protection and Medicaid Planning
One of the key advantages of a Lady Bird Deed is its potential to protect the value of a homestead from Medicaid estate recovery. When properly executed, the deed allows the homeowner to retain full ownership and use of the property while designating a beneficiary to automatically receive the property upon the owner’s death. Because ownership only transfers at death—and not during the owner’s lifetime—the property is typically not considered a countable asset for Medicaid eligibility, nor is it subject to estate recovery under current Texas law.
Avoiding Probate
By naming a remainder beneficiary in a Lady Bird Deed, the property bypasses probate altogether. Upon the homeowner’s death, the property passes directly to the named individual(s) without court involvement, saving time, reducing stress for heirs, and eliminating legal fees commonly associated with probate administration. This makes the Lady Bird Deed an efficient and cost-effective estate planning tool.
Speed and Simplicity of Transfer
Unlike traditional wills, which may take months to process through the probate courts, a Lady Bird Deed facilitates an immediate and automatic transfer of the property to the beneficiary. The deed is filed with the county clerk during the owner’s lifetime, and no further legal action is required after death. This allows heirs to take control of the property much more quickly and with fewer complications.
Continued Control During Lifetime
Unlike standard life estate deeds, the Lady Bird Deed gives the grantor full rights to sell, lease, mortgage, or even revoke the deed entirely without needing the consent of the beneficiary. This flexibility is essential for individuals who may want or need to change their estate plans or access their property’s equity during their lifetime.
Final Notes
A Lady Bird Deed in Texas offers a strategic way to manage and protect real estate assets, particularly a homestead, as part of a broader estate plan. It enables property owners to maintain control, avoid probate, and potentially shield their home from Medicaid estate recovery—all without the need for complex legal instruments. However, it’s always advisable to consult with an experienced estate planning attorney to ensure it aligns with your individual financial and healthcare planning goals.
If you believe you need a Lady Bird Deed, contact Andrew Dunlap Attorneys for more information or assistance in getting your deed set up properly and filed according to law.
