Enhanced Life Estate Deeds
In making estate plans, real estate transfer questions often arise. Most property owners have similar goals in dealing with real estate. First, they want to retain as much control over the property as possible while they are live. Second, they want to transfer the title to the property the easiest way possible. Texas recognizes two commonly used forms to transfer title in addition to transferring real property through your Will or a living trust: a transfer on death deed (TOD) and an Enhanced Life Estate Deed, also known as a Lady Bird Deed. While both deeds have the same ultimate effect in conveying title from you to your loved one, they operate differently while you are alive.
A TOD is a newer form of title transfer and was first authorized in Texas in 2015. The TOD allows a property owner in Texas to designate a beneficiary to receive the property at the owner’s death. These written instructions work similarly to pay on death instructions used by banks or other financial institutions. On the owner’s death, the named beneficiary receives the property without the need for probate.
An Lady Bird Deed is a more traditional method of transferring title to real property after death. These deeds work by conveying the property to the new owner (called the remainder beneficiary) at death, but reserving a life estate for the original owner. This life estate allows the original owner to use the property during his lifetime. The life estate is considered “enhanced” as opposed to a typical one because the original owner, now the life tenant, keeps the ability to control what happens to the property during his lifetime. This means the life tenant can mortgage or unwind the transfer and sell the property to a third party. These deeds are only used in Texas, Florida, Michigan, Vermont and West Virginia and are not recognized by any other state.
While these two deed forms have the same goals, additional considerations must be factored in determining which one to use in an estate plan. Concerns over possible creditor claims, the Medicaid 5 year lookback and recovery requirements, and whether a Power of Attorney will be used to execute the deed are all important considerations and each impacts the use of a TOD or Lady Bird Deed differently.
If you need assistance addressing any issues relating to estate planning, the attorneys at Waldron & Schneider are here to assist.
The legal information in this blog entry is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction. Further, nothing contained in this article is intended to create an attorney-client relationship with any reader. This article and website are made available by Waldron & Schneider for educational purposes only and to give basic information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney client relationship between you and Waldron & Schneider. The article and website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. For more information or questions you can contact us and one of our attorneys will be in touch soon.
Recent Posts
Categories
Partner Vanessa J. Maduzia was interviewed by Sara Blumenfeld with Networking Done Differently regarding her areas of practice.
www.ws-law.com
Vanessa J. Solis-Maduzia’s Interview with Sara Blumenfeld with Networking Done Differently Partner Vanessa J. Solis-Maduzia was recently interviewed by Sara Blumenfeld with Networking Done Different...0 CommentsComment on Facebook
Collin Bullard writes about a recent court decision regarding a new attempt to pierce the corporate veil in his blog.
A New Attempt to Pierce the Corporate Veil
www.ws-law.com
Piercing the corporate veil means to disregard the limited liability protection of an entity for its owners and attack them directly.0 CommentsComment on Facebook
Congratulations to Partner Richard Simmons and his dance partner Eva de Cardenas for winning the Dancing with the Stars - Bay Area Mirror Ball.
3 CommentsComment on Facebook
Congratulations!
Congratulations!
Fabulous!! Congratulations to two amazing people who serve our community well🥰
Collin Bullard writes about a recent court decision that choose where a person can file their lawsuit in his blog.
Recent Court Decisions: Choosing Where You Litigate
www.ws-law.com
A forum selection clause allows the parties to a contract to decide where they will go to court if there is someday a lawsuit relating to the contract.0 CommentsComment on Facebook
Collin Bullard writes about the Corporate Transparency Act and what small businesses need to be aware of.
Small Businesses Beware: The Corporate Transparency Act
www.ws-law.com
The Corporate Transparency Act begins requiring most entities to file registration documents with the Financial Crimes Enforcement Network.0 CommentsComment on Facebook