Texas families often look for a simple way to keep the house in the family without long court delays. A Lady Bird Deed may be that missing piece, letting you pass property to loved ones while you stay in full control during life.
At Bromlow Law, PLLC, we have helped many clients use this deed to save time, lower costs, and protect their home from Medicaid estate recovery. In this guide, we share how it works, its perks, its pitfalls, and the basic steps to set one up.
What is a Lady Bird Deed?
A Lady Bird Deed, formally called an enhanced life estate deed, lets a homeowner name who will receive the property at death while keeping every ownership right while alive. The owner may sell, lease, or even take out a new loan without asking the future recipient. Texas courts accept these deeds through common-law traditions, not by statute, yet title companies and county clerks still record them when drafted correctly. The quirky name arose after a Florida lawyer used President Lyndon B. Johnson and Lady Bird Johnson in an example during a speech, and the phrase stuck.
Key Benefits of Using a Lady Bird Deed
Many Texans choose this deed for the advantages below:
Probate Avoidance
The property moves straight to the named person on the death of the owner, skipping probate court. Loved ones may record the death certificate with the county and gain a clear title in a matter of weeks, sparing legal fees and stress.
Medicaid Planning Advantages
Texas Medicaid rules often seek repayment from a deceased recipient’s estate. A Lady Bird Deed keeps the home outside that process, so the house may pass to the family free of Medicaid liens.
Retained Control and Flexibility
The grantor keeps every power over the home, including the right to revoke the deed. That freedom makes the document feel safe for owners who still wish to downsize, refinance, or move later.
Potential Tax Benefits
At death, the beneficiary receives a stepped-up basis set at the home’s market value on that date. Later sales can then trigger lower capital gains taxes. The homestead exemption and over-65 tax freeze remain intact during the owner’s life.
- The home stays in the owner’s name for tax and creditor homestead protections.
- The deed does not count as a gift during life, so no federal gift tax return is needed.
Potential Drawbacks of Lady Bird Deeds
Despite strong perks, some risks call for careful review.
Limited Creditor Protection
If the owner racks up debts, a judgment lien against the home can still attach and follow the property after death, landing on the beneficiary’s shoulders.
Title Insurance Issues
A few underwriters hesitate to insure a sale by the beneficiary if the wording in the deed is sloppy. Clear drafting by an attorney goes a long way toward avoiding this snag.
Multi-State Property Complications
Lady Bird Deeds only work in a handful of states. If you own cabins in Colorado or land in Oklahoma, you will need another tool for those parcels.
Potential for Legal Disputes
Heirs who feel left out may sue, claiming undue influence or lack of capacity. Proper signing before a notary and two disinterested witnesses helps cut that risk.
Creating a Lady Bird Deed in Texas: A Step-by-Step Overview
The outline below shows the basic path from idea to recorded deed.
Essential Requirements
The deed must:
- State the full legal name of the grantor with the capacity to contract.
- Name one beneficiary with clear spelling and address.
- Contain the precise legal description from the last recorded deed.
- Reserve a life estate plus the power to sell, convey, and mortgage.
- Carry the grantor’s notarized signature.
The Drafting Process
An estate planning attorney prepares language that tracks Texas case law, inserting the enhanced life estate clause and any desired powers. The future recipient’s consent is not needed for signing.
Filing the Deed
After signing, the original is filed with the county clerk where the land sits, and the clerk returns a stamped copy for safekeeping.
Importance of Legal Counsel
Mistakes on legal descriptions or missing power clauses can cloud the title for decades. A short meeting with counsel often costs far less than title curative work later.
Lady Bird Deeds vs. Other Estate Planning Tools
The chart below highlights how a Lady Bird Deed stacks up against common options Texans use for real estate.
| Tool | Probate Needed? | Owner Control During Life | Medicaid MERP Shield | Cost Level |
| Lady Bird Deed | No | Full | Yes | Low |
| Standard Will | Yes | Full | No | Low |
| Revocable Living Trust | No | Full | Not in Texas! Makes the home countable for Medicaid eligibility. | Medium-High |
| Transfer on Death Deed (TODD) | No | Full | Often Yes | Low |
| Traditional Life Estate Deed | No | Limited | Yes | Low |
Lady Bird Deed vs. Will
If the deed and a later will conflict, Texas law gives weight to the deed regarding that property. This fact makes the document a powerful stand-alone tool when you only need to pass a single parcel.
Lady Bird Deed vs. Revocable Living Trust
A trust can hold bank accounts, brokerage funds, and multiple houses, bringing broad management abilities. Yet many families with only one homestead pick the simpler deed to save drafting fees and yearly upkeep.
Lady Bird Deed vs. Transfer on Death Deed (TODD)
TODDs sit in the Texas Estates Code and allow alternate beneficiaries. They never trigger the “due on sale” clause in a mortgage. Some owners still prefer the Lady Bird form for the extra retained powers it offers.
Lady Bird Deed vs. Life Estate Deed
A standard life estate gives the remainder beneficiary a present interest, so the owner’s decisions need their sign-off. The enhanced version removes that hurdle, leaving the owner free to act alone.
Medicaid and Lady Bird Deeds: Protecting Your Home
The Texas Medicaid Estate Recovery Program (MERP) may claim assets of a deceased recipient. A correctly recorded Lady Bird Deed keeps the homestead outside the estate definition used by MERP. Since the transfer happens instantly at death, no claim attaches, and the house can continue in the family. For best results, sign and record the deed before the Medicaid application to avoid look-back concerns.
Joint Lady Bird Deeds: Considerations for Spouses
When spouses own a home together, a joint Lady Bird Deed can pass the house to children after the second death. Yet problems can crop up if the first spouse dies and the survivor later wants to change the plan. Custom wording can grant the survivor full power to revoke or amend the deed, so be sure your attorney addresses that point.
Considering a Lady Bird Deed? Contact Us Today
Our team crafts Lady Bird Deeds that work smoothly with wills, trusts, and long-term care goals. Laura L. Bromlow, a Certified Elder Law Attorney, takes pride in guiding clients through family-focused planning that keeps property secure for the next generation. Call us at (281) 665-3807 or visit our Contact Us page to start the conversation and see if this simple deed fits your needs. Peace of mind over your home can begin with one quick phone call.