Texas Lady Bird Deed

An Enhanced Life Estate Deed (commonly referred to as a Lady Bird Deed) is a type of deed that transfers title to a grantee with an enhanced life estate retained by the grantor. The life estate is enhanced because the grantor has the ability to convey the property to someone other than the grantee, mortgage the property, or otherwise encumber the property during the life of the grantor. A sample reservation clause is detailed below:

Sample Conveyance Clause

Grantors reserve, for Grantors and Grantors' assigns, the full possession, benefit, and use of the Property for the remainder of the lives of both Grantors, as a life estate. The Grantors (while both Grantors are living) and the surviving Grantor (following the death of one of the Grantors) further retain complete power, without the joinder of any person, to mortgage, sell, and convey the Subject Property, in whole or in part, and to spend any proceeds; to exchange the Subject Property for other property; to lease the surface of the Subject Property; to grant any interest in the Subject Property, by gift, sale or otherwise, so as to terminate the interests of Grantee, as Grantors in Grantors' sole discretion (or by the surviving Grantor, in the surviving Grantor's sole discretion) shall decide; to invest and reinvest all proceeds from the sale or other disposition of the Subject Property; and to possess and consume all proceeds from the sale or other disposition of the property to the exclusion of Grantee.

Why Use This Type of Deed?

The Lady Bird Deed is most commonly used to prevent the state of Texas from recovering funds from the estate of a grantor that received Medicaid benefits while alive. Texas is one of five states that recognizes the Lady Bird Deed as a means of avoiding estate recovery after the passing of the grantor. It is wise to consult a real estate attorney about the use of Enhanced Life Estate Deeds. Feel free to use the form below to request a free consultation or call our office during regular business hours.