Lady Bird deeds and transfer on death deeds (TODDs) are extremely useful but often overlooked estate planning tools available in Texas. These unique deeds provide simple ways to transfer real estate while retaining control and avoiding probate.
A Lady Bird deed, also known as an enhanced life estate deed, is a deed that allows you to automatically transfer your real estate property to designated remainder beneficiaries when you pass away. It does this while allowing you to retain full control and ownership of the property during your lifetime. The deed grants you a revocable life estate in the property.
A Lady Bird deed allows the grantor additional flexibility. You can sell the property and keep the sale proceeds, mortgage the property, and change the designated remainder beneficiaries, all without needing approval from the beneficiaries.
A transfer on death deed (TODD) works similarly to a Lady Bird deed. It is a deed that allows you to transfer your interest in a real property to a designated beneficiary automatically upon your death. It transfers the property outside of probate.
A TODD is revocable, meaning as the transferor you can revoke the TODD anytime before your death. This is done by recording a new deed with the county or filing a cancellation form. The TODD beneficiary has no vested rights to the property and no say in its disposition until your death.
The primary benefit of both Lady Bird deeds and TODDs is that the real estate property transfers seamlessly to your chosen beneficiaries when you die without needing to go through probate. The transfer happens automatically outside of court.
With both a Lady Bird deed and a TODD, you as the grantor/transferor retain a life estate interest in the property. This means you maintain full rights to use, possess, derive income from, and control the property during your lifetime.
While Lady Bird deeds and TODDs accomplish similar goals, they have some important distinctions:
Lady Bird deeds and TODDs can provide simple yet powerful tools in Texas to avoid probate while retaining lifetime control, and seamlessly transferring property at death outside the court process. However, the differences between the two deeds and their potential advantages and disadvantages should be carefully weighed.
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Disclaimer: The content of this website is for informational purposes only and should not be construed as legal advice and should not be acted upon without consulting a qualified probate attorney.
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