Understanding Transfer On Death 'Ladybird' Deeds

For many years, Texas has accepted transfer on death (TOD) deeds, and in September 2015, the state included transfer on death deeds in the Texas Estates Code. Aptly named, these deeds allow a person to transfer real estate to a beneficiary upon his or her death.

Transfer on death deeds, nicknamed "Ladybird" deeds, serve as enhanced life estate deeds. They allow you to retain control of your property during your lifetime; you can use the property, rent it or even sell it. If, at your death, you still own the property, then it will transfer according to the terms of the deed.

Five Things To Know About Transfer On Death Deeds

  1. They are sometimes referred to as "beneficiary deeds."
  2. Your property doesn't change hands until you actually pass away. This means you can change your mind and revoke the deed, sell the real estate or make other arrangements at any time.
  3. If you pass away and there isn't enough money in your estate to pay your creditors, estate taxes and other costs, the real estate transferred by the TOD deed may be used to pay the debts.
  4. Because the deed retains an enhanced life estate, any property that is the subject a TOD deed should not count as a transfer for the purposes of qualifying for Medicaid.
  5. The TOD deed is a non-testamentary instrument, meaning that the transfer occurs outside of probate and the terms of your will.

At Hayes & Wilson, PLLC, we understand the pros and cons associated with transfer on death deeds. From our headquarters in Houston, we advise and assist clients throughout the area who have estate planning concerns.

We are proud to provide compassionate, hands-on support in these matters. Plus, our founding attorney, William R. Hayes, has decades of experience in this area of law. He is also board certified in estate planning and probate law by the Texas Board of Legal Specialization.

Arrange A Consultation With A Lawyer Today

Call Hayes & Wilson, PLLC, to set up a initial consultation about your estate planning goals and needs. Call our Houston office at 713-880-3939 or send us an email.