When you think about how to give your home to a loved one after you die, your first thought might be, “My last will and testament.” However, a will is not your only choice when giving real estate to loved ones after you die. Longer probate proceedings are not inevitable when passing your estate on to the next generation. You can give your family or friends real property upon your passing and avoid probate by giving them an enhanced life estate deed.
An enhanced life estate deed in Texas can make the distribution of a person’s estate easier, but properly executing this deed can be tricky when you don’t have the right help. This is why you should call our estate planning attorneys at Robbins Estate Law. We are top estate planning attorneys with a reputation for finding the best solutions for our clients.
What Is an Enhanced Life Estate Deed?
An enhanced life estate deed, also known as a Lady Bird deed, is a legal document that allows you to keep control of your property during your lifetime while naming someone to automatically receive it when you die. While alive, you can still sell or mortgage the property in the deed. And if you change your mind about the arrangement, you can revoke the deed before you die.
What Are the Benefits of a Lady Bird Deed?
Thinking about what will happen to your loved ones after you pass is hard enough. But imagining those you love struggling to assert their rights to the resources you left for them can add an extra layer to your worries. A Lady Bird deed can cut through many of these concerns in the following ways.
1. You Can Avoid ProbateÂ
Without a Lady Bird deed, your family and friends would likely have to participate in probate proceedings to determine who has the right to your real estate. This is true even if you have a will. No will is valid until someone submits it to probate. Also, others may contest a will’s validity during probate. And if you die without a valid will, Texas’s intestate succession laws decide who will inherit your property.
During a probate proceeding, your potential creditors and beneficiaries can make claims on your estate. After reviewing your will and any evidence the parties present during probate, the court must decide which claimants will receive each asset you leave. Probate is often a time-consuming and costly process. But the real estate you place in a Lady Bird deed bypasses probate and goes directly to your chosen beneficiary.
2. You Can Retain Control over Your PropertyÂ
Another way to avoid probate is to simply transfer your property to your loved one before you die. However, making an outright transfer is not always the best option if you want control over your property until the day you die. This is especially true when you want to transfer the home you live in. Even if you don’t live in the home you want to give to a loved one, you may want that home in your control during your lifetime for financial or other reasons.
Unlike other property transfers, you don’t lose control over the property you grant in a Lady Bird deed. You can also change your mind about the transfer before you die, as can someone you have given power of attorney.
What Are the Limitations of a Lady Bird Deed?
A Lady Bird deed is a great solution in many estate planning cases, but it has setbacks. You may have to ask for permission from the beneficiary to sell your home while you are still alive.
This type of deed may also trigger a due-on-sale clause in a mortgage on the property. If your deed triggers this clause upon your death, the recipient of your home may be immediately liable for the entirety of whatever loan encumbers the property.
You also cannot choose alternate beneficiaries in a Lady Bird deed. If you do not execute or monitor your enhanced life estate deed properly, you or your loved one might end up sharing your home with others in a way you did not intend. This unintended sharing recently occurred in Wright v. Jones, 674 S.W.3d 704 (Tex. App. 2023).
In Wright, a husband and wife executed a Lady Bird deed that granted their home to the husband’s son (the wife’s stepson). The husband in Wright died first, and the holder of the wife’s power of attorney revoked the Lady Bird deed after the husband’s death. Although the holder of the wife’s power of attorney thought the wife would retain the entirety of the estate after revocation, she did not. The court concluded that the wife’s revocation of the deed did not revoke her stepson’s right to the husband’s half of the estate, and the parties had to share. We can help you avoid this negative outcome and more when you consult us for estate planning help.
We Can Give You an Estate Plan That Works
When you seek a top-of-the-line estate planning attorney who cares deeply about your concerns, Robbins Estate Law should be your first call. Kyle Robbins is our firm’s lead attorney and multi-award-winning advocate. Our team also has decades of combined experience to help you through any estate planning matter. You can contact us online or call us to schedule an appointment.
Resource ListÂ
- Wright v. Jones, 674 S.W.3d 704 (Tex. App. 2023), linkÂ
- Gerry W. Beyer, Recent Developments from the Texas Courts, p. 21, linkÂ
Kyle Robbins
Kyle Robbins is the founder and sole owner of The Law
Offices of Kyle Robbins. He received his J.D. with honors from the University of Texas School of Law and his B.S. in Food Chemistry and Microbiology from Oklahoma State University.
Rate this Post
Loading...