Texas Lady Bird Deed Vs. Transfer on Death Deed

There are so many adults today who don’t take the time to create their last will and testament, and their loved ones are forced to learn the hard way about the processes involved with transferring a property once someone has passed. Unfortunately, passing on your belongings is not as quick and simple as it seems in movies and televisions, and many times the assets you are attempting to pass on will get tied up in a long and costly process called probate.

Estate planning can be quite complex, but there are two very important deeds that can help a property owner avoid probate in the state of Texas: the Lady Bird Deed and the Transfer on Death Deed.

These deeds have similar goals, such as avoiding real estate recovery, but they have a few key differences. The more you know about each of these deeds and what they entail, the better prepared you will be with your future estate planning efforts.

Continue reading to learn more about deeds and transferring property after death.

The Lady Bird Deed

Also known as the Enhanced Life Estate Deed, the Lady Bird Deed was designed to help pass property on from one individual to the next, outside of probate. The Lady Bird Deed typically allows the grantor to maintain the right to keep the property, sell it, lease it, or mortgage it and keep all proceeds of the property.

This enhanced life estate arrangement can do a number of things, including:

• Allow for the transfer of the remaining interest on a piece of real estate
• Allow the current owner to reside on the property
• Allow the current owner to terminate the remaining interest on a property and transfer it to someone else
• Allow individuals to bypass the gift tax

The Lady Bird Deed can be signed by an agent acting as a power of attorney. In most situations, if the grantor lacks mental capacity, it is best to use the Lady Bird Deed, instead of the Transfer on Death Deed.

Transfer on Death Deed

Much like the Lady Bird Deed, the Transfer on Death Deed is designed to avoid real estate recovery.

However, the Transfer on Death Deed is relatively new, is untested in any published court opinions, and has some drawbacks the Lady Bird Deed does not:

• It may not be executed by an agent under a power of attorney.
• The beneficiary must survive the grantor by 120 hours. This is not the case with a Lady Bird Deed.
• A Transfer on Death Deed is subject to claims against the estate for two years after the death of the grantor.

Every situation is different, which is why there are situations where the Lady Bird Deed may be more desirable than a Transfer On Death Deed.

Contact Your Legacy Legal Care Today

Now that you know the difference between Lady Bird Deeds and Transfer On Death Deeds, you can make an informed decision about passing along your belongings once you’re gone. Still, understanding estate planning can be complicated. It’s in your best interest to work with an experienced attorney so that you and your family can benefit from your deed.

Want to know which deed is right for you? You can always speak to the estate planning attorneys here at Your Legacy Legal Care.

Contact us to schedule a strategy session.

FAQ: Estate Administration

What is probate?

Probate is the process after one passes away where their will gets carried out. The executor of the decedent’s estate goes through the probate process. Some of their duties include paying off remaining debts, appraising the decedent’s estate, and distributing assets to beneficiaries. If you’re an executor and need help with this process, contact a probate attorney.

How do I assign an executor of my estate?

You can assign an executor by appointing a person in your will. An executor is responsible for handling your estate once you’re gone, so it’s important to choose someone you trust.

If you don’t appoint an executor in your will, the courts will assign someone this role after you pass away. This can cause problems if the courts choose someone you do not trust. Therefore, it’s important to name your executor in advance.

What happens if I die without a will?

A will states how you want to distribute your assets once you die. So if you pass away with a will, the courts will decide how to distribute your belongings. A will is a beneficial document because you can choose who gets what.

For example, if you have a sentimental item you’d like to pass down to your child, you can specify that in your will. We advise creating a will with a reliable attorney so that it’s legal and valid.