Learn
How a Texas Lady Bird Deed works
One problem, four options, and the plan Cole designs for Texas families: the Lady Bird Trust. Plain English, about ten minutes to read.
The problem: probate
When you die, your house is still in your name. Nobody can sell it, refinance it, or insure it in their own name until the county records show who owns it now. Getting from "Mom's name" to "our names" is the problem every plan is trying to solve.
Without a plan, that usually means a Texas court. A judge decides who your heirs are, or confirms your will, and the court's order becomes the paper trail. It works, but it takes months, it costs money, and your family has to do it while they are grieving.
Four ways a Texas home passes at death
Every Texas family ends up in one of these four. The question is whether you choose, or the law chooses for you.
No plan
Texas law picks your heirs. A court usually has to confirm who they are, and every heir may have to sign before the house can be sold.
A will
You pick who gets the house, but the will still goes through probate court before the title changes.
A Lady Bird Deed
You name who gets the house, keep full control while you live, and the house passes at death without court.
A living trust
You move your property into a trust now. Thorough, but it means retitling your home today and managing it as trustee.
Each of these solves part of the problem. The Lady Bird Trust joins the best of options 3 and 4: the deed keeps your home out of probate and in your control, and the trust holds your instructions for everything that comes after. It is the plan Cole designs for the families he serves, covered below.
How the deed works
Think about the beneficiary line on a life insurance policy. While you are alive, the policy is entirely yours. You can change the name, cancel the policy, or cash it in, and the person you named has no say. When you die, the money goes straight to them. No court.
A Lady Bird Deed puts a beneficiary line on your house. You sign a deed today that keeps a special life estate for yourself, with the right to do anything you want with the house, and names who receives it when you die.
While you live
- You own it and live in it
- You can sell, mortgage, or lease it
- You can change your mind and undo the deed
- Nobody you named has to sign anything
When you die
- The house passes to the people you named
- No probate court for the house
- They record a copy of the death certificate
The official name is an enhanced life estate deed. "Lady Bird" is the nickname, which comes from an old lawyer's teaching example that used President Johnson's wife as the sample owner.
What you keep
- Control. You can sell, refinance, or take out a reverse mortgage without asking the people you named.
- Your homestead exemption. You still own and live in the home, so your property-tax exemption continues.
- Your mortgage. Having a mortgage does not stop you from signing a Lady Bird Deed.
- The right to change your mind. You can name different people later or undo the deed by signing a new one.
- Your heirs' tax position. Because you own the home until death, the people you named generally inherit it the same way they would through a will. Ask your tax preparer about your situation.
Medicaid and nursing-home planning. Texas Medicaid's estate recovery program generally looks to what passes through probate, and a home that passes by Lady Bird Deed does not go through probate. The rules are detailed and they change. If long-term care is part of your planning, talk to an attorney before you sign.
Where a deed alone falls short
A Lady Bird Deed has one job: get the house to the people you named. It does that job well when life goes the way you expect. Life rarely cooperates that neatly, and these are the places a deed alone leaves your family exposed:
- Someone you named dies before you. The deed alone may send their share somewhere you did not intend.
- A child under 18 inherits. A minor cannot sign to sell a house, so the family may need a court guardianship to do anything with it.
- Your children cannot agree. Each child owns a piece of the house, and any one of them can stop a sale.
- A child is in trouble. A share of the house can be reached by a child's creditors, bankruptcy, or divorce.
- You own more than the house. The deed covers only the home. Bank accounts, vehicles, and everything else need their own plan.
The plan that closes the gaps: the Lady Bird Trust
The deed says who. The trust says how.
A Lady Bird Trust keeps everything good about the deed and fixes its gaps. You still sign a Lady Bird Deed and keep full control of your home. The difference is who you name: instead of naming your children directly, you name your own revocable trust. The trust holds your instructions for what happens next.
Your home
Passes at your death
Your children, directly
Each owns a share. All must agree to sell. No backup plan.
Your home
Passes at your death
Your trust
One trustee follows your written instructions: backups, young or struggling children, when to sell.
What the Lady Bird Trust includes
- Revocable trust with your instructions for after you are gone
- Lady Bird Deed naming your trust, so the home skips probate
- Pour-over will as a safety net for anything left outside the trust
- Certificate of trust for banks and title companies
- Guidance setting up a trust checking account
- Financial and medical powers of attorney, and a medical directive
- Personal property memorandum
Cole designs the plan around your family, drafts every page so the pieces work together, and his office handles the signing and recording. Plans start at $4,000.
Common questions
Does a Lady Bird Deed avoid probate in Texas?
For the house, yes. The home passes to the people you named when you die, without a court order. Everything else you own still needs its own plan.
Can I sell or refinance my house after signing a Lady Bird Deed?
Yes. You keep the right to sell, mortgage, or lease the home without the signatures of the people you named.
Will I lose my homestead exemption?
No. You still own and live in the home, so your homestead exemption continues.
What is the difference between a Lady Bird Deed and a transfer on death deed?
Both pass a Texas home outside probate. The transfer on death deed is a form written into the Texas Estates Code. The Lady Bird Deed keeps a special life estate for you with broad powers over the property, and it is the deed the Lady Bird Trust uses.
How much does a Lady Bird Trust plan cost?
A complete Lady Bird Trust plan designed by Cole starts at $4,000. The first step is a 90-minute Estate Planning Design Meeting, which is $500. Recording fees at the county clerk are extra.
Do I need a lawyer to make a Lady Bird Deed?
Texas does not require one. A deed by itself still leaves the gaps above: no backup if someone you named dies first, no plan for a minor, and no one in charge if your children disagree. The Lady Bird Trust closes those gaps, and Cole drafts the deed, trust, and will to work together. See how working with Cole works.
Keep reading
- Everything You Should Know About Lady Bird Deeds in Texas: Benefits and RisksArticles from Cole
- What Does Probate Mean in Texas?Articles from Cole
- Blended Families: Don’t Assume Your House Goes to Your Spouse After You DieArticles from Cole
- Do I Need a Trust?Articles from Cole
Your next step
Book your Estate Planning Design Meeting
90 minutes, by phone or at the office in Iowa Park. Megan gathers your family and property information, then you spend an hour with Cole. You leave knowing what your Lady Bird Trust plan includes, what it costs, and how long it takes.
$500, paid when you book. Lady Bird Trust plans start at $4,000. Prefer to call? (940) 264-3041.
Not ready yet? Read Cole’s short book, A Texas Guide to Lady Bird Deeds, or browse his articles.
Young children at home?
No deed can name a guardian for your kids. Only a will can. 1274 Wills is a guided Texas will for parents that names a guardian and sets up a trust for your children.