Lady bird deeds
& transfer on death
deeds in Texas

For most Texas families, the house is the largest asset and the one that makes probate necessary. If the house can pass outside probate, a great deal of cost and delay goes with it.

Both of these deeds accomplish that. You sign and record a deed now. It transfers nothing today. When you die, the property passes automatically to the beneficiary you named. Because the transfer happens outside the probate estate, that parcel does not need to be probated at all.

Critically, neither one gives your beneficiary any present interest. You are not making a gift. You can sell the house tomorrow and the beneficiary has no say and no claim.

Why this matters for Medicaid. The Texas Medicaid Estate Recovery Program (MERP) recovers only against a deceased person’s probate estate. Property that passes automatically by one of these deeds is generally outside that estate and outside MERP’s reach. That is a substantial benefit for families where a parent may need long-term care — but the deed must be right, and the timing matters, so talk to us before you record anything.

A lady bird deed conveys the property to your beneficiary, subject to a life estate that you keep — and, crucially, an enhanced life estate that reserves your unrestricted power to sell, mortgage, lease, gift, or revoke without the remainder beneficiary’s consent or signature.

The distinction matters. A plain life estate deed hands your children a vested remainder interest today. If you later want to sell or refinance, you need their signatures — and if one is going through a divorce or has a judgment against them, that interest is exposed. The enhanced life estate solves this by retaining every meaningful power.

What to know about lady bird deeds in Texas

• No statute. Texas has never codified the lady bird deed. It works because the retained powers are valid under general Texas property law and because Texas title insurers have accepted it for decades. That long track record is its main practical advantage.
• Full retained control. Sell, refinance, lease, or revoke — no beneficiary consent needed.
• No present gift. Generally no gift tax event and no loss of your step-up in basis at death.
• Homestead exemption preserved. You remain the owner for exemption purposes during your life.
• Drafting is everything. Because there is no statutory form, a sloppy lady bird deed can be construed as a plain life estate deed — which is the exact outcome you were trying to avoid.

Texas adopted the transfer on death deed effective September 1, 2015. Unlike the lady bird deed, every rule here is written down.

§ 114.055 — RequirementsA transfer on death deed must: (1) contain the essential elements and formalities of a recordable deed; (2) state that the transfer of an interest in real property to the designated beneficiary is to occur at the transferor’s death; and (3) be recorded before the transferor’s death in the deed records in the county clerk’s office of the county where the real property is located.

The statutory rules you need to know

• § 114.054 — Capacity and powers of attorney. The capacity required to make or revoke a TOD deed is the same as the capacity to make a contract. A transfer on death deed may not be created through use of a power of attorney.
• § 114.056 — No notice required. Notice, delivery, acceptance, and consideration are all unnecessary. Your beneficiary does not need to know, sign, or pay anything.
• § 114.057(b) — A will cannot revoke it. This is the single most misunderstood rule in Chapter 114. Your will has no power over a recorded TOD deed.
• § 114.057(c) — Divorce. A final judgment dissolving the marriage between the transferor and a designated beneficiary revokes the deed as to that beneficiary, if notice of the judgment is recorded in the deed records before the transferor’s death.
• § 114.104 — Liens follow. The beneficiary takes the property subject to all existing liens and encumbrances. The mortgage does not vanish.
• § 114.106 — Creditor claims, two-year window. If the probate estate is insufficient, the personal representative may enforce liability for claims, administration expenses, estate taxes, and statutory allowances against property transferred by TOD deed, to the same extent as if the property were part of the probate estate. A proceeding to enforce that liability must be commenced no later than the second anniversary of the transferor’s death.

How to revoke a Texas TOD deed

Only by recording something, before you die, in the county where the property sits:

1. A recorded instrument of revocation; or
2. A new transfer on death deed naming a different beneficiary; or
3. A recorded deed conveying the property away during your lifetime.

1. Never recorded. The most common failure. A TOD deed signed and filed in a folder instead of at the county clerk is void at death (§ 114.055). Recording is not optional and it is not something to get to next month.

2. “My new will takes care of it.” It does not. Estates Code § 114.057(b) says a will may not revoke or supersede a TOD deed. If you signed a TOD deed to your son in 2019 and your 2026 will leaves the house to your daughter, your son gets the house.

3. The beneficiary dies first. If your named beneficiary predeceases you and the deed has no alternate beneficiary, the transfer generally fails and the property falls back into your probate estate. Name contingent beneficiaries.

4. Multiple beneficiaries who don’t get along. Leaving one house to four children by deed creates four co-owners with equal rights and no mechanism to resolve a dispute. If one wants to sell and three don’t, the answer is a partition suit. Think about this before you name.

5. Mortgage and insurance. The lien survives (§ 114.104). Your beneficiary inherits a house with a mortgage on it and needs a plan for the payments and for getting insurance in place immediately.

6. Waiting until capacity is in question. A TOD deed requires contract-level capacity and cannot be signed by an agent under a power of attorney (§ 114.054). Once capacity is genuinely doubtful, this door closes.

These deeds solve one problem well. They are not an estate plan.

• They only cover the property described in them. Your accounts, vehicles, personal property, and any other real estate are untouched.
• They do not name a guardian for your children. Only a will does that.
• They do nothing if you become incapacitated. That requires a durable power of attorney and medical directives.
• They provide no ongoing management. If your beneficiary is a minor, has a disability, or should not receive property outright, you need a trust instead. Deeding property directly to a beneficiary who receives SSI or Medicaid can cost them their benefits — see special needs trusts.
• They do not settle debts. Estate creditors can still reach TOD property within the two-year window under § 114.106.

How we usually use them. A lady bird or TOD deed sits alongside a will, a durable power of attorney, and medical directives — taking the largest asset out of probate while the rest of the plan handles everything else. It is a component, and a very good one.