Enhanced life estate deeds, commonly referred to as Lady Bird deeds in Texas, offer a valuable method for transferring ownership of real property upon death. The moniker "Lady Bird Deed" is believed to have originated when President Lyndon B. Johnson used one to convey property to his wife, Lady Bird, although this story is more of an urban legend than fact.
Lady Bird deeds are a type of life estate deed designed to automatically transfer property ownership upon the original owner's death to a designated individual. Importantly, this deed allows the original owner to retain full use, control, and ownership of the property during their lifetime.
Upon death, the beneficiary of the property does not acquire any immediate rights or ownership interests in the property. Their consent is not required for the original owner to sell, convey, or modify the use of the property. The Lady Bird deed becomes null and void if the original owner decides to sell or convey the property during their lifetime. However, if the original owner passes away, the property covered by the Lady Bird deed is automatically transferred to the beneficiary, bypassing the probate process.
In contrast to a traditional Life Estate deed in Texas, the original owner does not relinquish control when naming a beneficiary. This means the original owner is not restricted from selling, conveying, or placing a lien on the property without the beneficiary's explicit consent. The original owner also retains the right to alter or terminate a Lady Bird deed without needing the beneficiary's agreement.
Benefits of a Lady Bird deed in Texas:
Potential downsides of a Lady Bird deed in Texas:
This type of deed can be a strategic tool for Texans to transfer property outside of probate. However, as with any real estate transaction or estate planning strategy, it's crucial to consult with a knowledgeable Austin estate planning attorney to discuss your goals and determine the best approach for your unique circumstances.
Reference: Florida Today (June 9, 2023) “Real estate transfers: Is a 'Lady Bird deed' right for me?”
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