A Texas lady bird deed form is a type of life estate deed designed specifically for estate planning. Lady bird deeds allow Texas property owners to avoid probate at death without sacrificing control over the property during life.
A property owner who creates a lady bird deed continues to own the property for the rest of his or her life. The lady bird deed names another person—called the remainder beneficiary—who will receive the property when the current owner dies.
A lady bird deed’s defining feature is that the current owner reserves the absolute right to sell, transfer, or mortgage the property until his or her death without the remainder beneficiary’s consent. 1
The term “Texas enhanced life estate deed” means the same thing as “Texas lady bird deed.” Lady bird deeds are technically called enhanced life estate deeds. The life estate is enhanced in the sense that it provides the property owner with more retained control than a traditional life estate deed. The name lady bird deed—which can also be written as ladybird deed (with no space)—is informal, but it is commonly used by real estate professionals.
A Texas ladybird deed form works by dividing ownership of the real estate into different time periods. The current owner has full, outright ownership of the property—called fee simple ownership—before signing the ladybird deed. Signing the deed divides the ownership into two legally distinct interests:
A ladybird deed typically transfers the property from and to the same person. Specifically, a current owner with complete ownership transfers the property to himself or herself as a life tenant.
The person who signs the deed continues to own the property for life and can continue to use it just as before. A lady bird deed form also names one or more remainder beneficiaries who will inherit the property when the life tenant dies.
A lady bird deed form provides an enhanced benefit that makes it particularly attractive to Texas property owners. A life tenant under a traditional life estate deed cannot transfer complete ownership of the property without the remainder beneficiary’s consent. A Texas lady bird deed overcomes this limitation by reserving to the original owner enhanced powers over the property.
The original owner—who becomes the life tenant—keeps the right to sell, gift, mortgage, or lease the property without involving the remainder beneficiaries. The owner, while still living, also has the right to change his or her mind about the transfer.
Attorney’s Practice Note: A remainder beneficiary’s interest under a lady bird deed is contingent on the current owner dying before exercising his or her right to sell or transfer the property. 2 The beneficiary receives the property outside of probate if the original owner dies still owning the property. If the owner elects to sell or transfer the property during life, the remainder interest does not vest, and the beneficiary does not receive the property when the owner dies.
A transfer under a lady bird deed is a nonprobate transfer if the owner dies before conveying the real estate. The property never becomes part of the owner’s probate estate, so the owner cannot revoke or amend the lady bird deed by will.
Texas lady bird deeds offer several key advantages over other deed forms that make them a valuable tool for Texas estate planning:
The name lady bird deed deals solely with the probate avoidance feature of the deed. Other types of deeds are named after the warranty of title that they provide (or don’t provide). Warranty of title is a guarantee that a deed will transfer legally valid ownership free of liens, mortgages, or other adverse third-party interests in the property. 3
Texas deeds named for their warranty of title include:
Each of these deeds is named after the warranty of title it provides. A deed’s warranty of title is independent of its probate avoidance features (if any). So, more than one name might apply to the same deed. For example, a Texas quitclaim deed may also be a Texas lady bird deed.
A Texas life estate deed form is a traditional estate-planning deed upon which lady bird deeds are based. A traditional life estate deed is like a lady bird deed in that it separates the property’s ownership into:
The difference is that a traditional life estate deed does not reserve to the owner the power to sell, convey, or mortgage the real estate during the owner’s life. A life tenant under a traditional life estate deed must protect the remainder beneficiary’s rights by doing nothing to impair or extinguish the remainder interest without the remainder beneficiary’s consent. That means the life tenant cannot sell, transfer, or mortgage the property unless the remainder beneficiary agrees. The life tenant can sell or transfer the life estate—i.e., the right to possess the property until the life tenant dies—but nothing more.
A Texas transfer-on-death deed form—commonly called a TOD deed—names a beneficiary who will automatically receive the property when the owner dies. 4 Like a lady bird deed, a Texas TOD deed lets the owner keep the property for life and then transfer it outside of probate. Lady bird deeds and TOD deeds also both preserve the owner’s right to sell, transfer, or mortgage the property. 5
An advantage of transfer-on-death deeds is that they are expressly authorized by Texas statute, while lady bird deeds are based on common law. The Texas Real Property Transfer on Death Act defines the rules, requirements, and legal effects of TOD deeds. Since that law was enacted in 2015, TOD deeds have become more popular than lady bird deeds. However, there are a few important differences that make lady bird deeds a better option in some scenarios:
See our article on Texas TOD Deed vs Lady Bird Deed for a more in-depth analysis of the difference between these two probate avoidance tools.
It is not uncommon for co-owners to create a Texas lady bird deed. The co-owners typically transfer the life estate to themselves—reserving to themselves the right to sell, transfer, or mortgage the property. The lady bird deed also names one or more remainder beneficiaries who have the right to the property when the last co-owner dies.
A lady bird deed is created by using a form includes language creating the enhanced life estate and meeting all Texas requirements that apply to other Texas deed forms.
Because the Texas lady bird deed form is not based on a statutory form, it is important to use a lady bird deed form that is customarily used in Texas real estate transactions. Real estate laws vary between states, so a lady bird deed created for Florida or Michigan, for example, may be invalid or unrecordable in Texas.
Lady bird deeds are regularly used in Texas and recognized by Texas title insurance companies, but they are not authorized by a specific statute. Texas attorneys have developed the form used for lady bird deeds to meet Texas title insurers’ requirements and Texas laws that govern all deeds. Like other Texas deeds, a lady bird deed must have proper formatting, an accurate legal description of the property, and the owner’s notarized signature.
Includes
Guaranteed to Meet State Formatting Requirements