Feb

22

2021

Slick Trick In Texas To Transfer Real Estate Without Probate

Posted by: Adair M. Buckner

Texas law allows a slick trick to transfer title to real estate you own on your death without probate. For many people, their residence or other real estate comprises the biggest part of an estate that normally would require probate to pass title.

passage-of-real-estate-on-your-death-will

Texas law has recognized an estate planning trick that is extremely effective and low cost, called a deed with an enhanced retained life estate or “Lady Bird” deed. This tool can be used for all types of real estate interests. If you have drawn up this deed to real property prior to your death, you might be able to avoid probate entirely, if the rest of your assets have been designated with beneficiary or payable on death arrangements.

With this type of deed, you can name the beneficiaries you wish to receive real estate on your death, who are called “remaindermen”, but you retain all of the benefits of ownership of the property until your death. Texas law allows you even to retain the property tax homestead exemption after the Lady Bird deed transfer. Upon your death, all that is required for full title to be transferred to the names of these beneficiaries is the filing of an affidavit in the county property records reflecting the date of your death, and that there are no outstanding debts of the estate and no estate or inheritance tax due. 

The Benefits 

Your Rights of Ownership Retained During Your Life

The enhanced life estate deed, or Lady Bird deed, if drafted properly, allows you as the owner of the “life estate” in the property to mortgage, lease, sell, or even revoke the deed without the consent of the remaindermen. This unique special feature of the Lady Bird deed or deed with enhanced life estate is not recognized in all states, however, so out-of-state property may or may not be dealt with in this same manner. Your attorney will need to research whether this deed can be used in the same way in other states. 

Saves Time, Trouble, and Expense

The Lady Bird or enhanced life estate deed makes the transfer of title to your beneficiaries on your death much quicker. It also eliminates the trouble and expense of probate or some other simpler non-probate procedure to transfer title to real estate on your death. The expense savings can amount to thousands of dollars. 

Medicaid Qualification

If you are in a situation in which you are applying for Medicaid benefits, the Lady Bird or enhanced life estate deed also is beneficial. The value of your interest in the property, your life estate, will be much less than the full value of the property in calculating your eligibility for Medicaid. This may make the difference between qualifying and not qualifying or for how long you are disqualified from receiving benefits.

Medicaid Lien Avoidance

If you need to receive Medicaid assistance during your lifetime, the federal government can place a lien on property of your estate for the amount paid on your behalf. Currently, another major benefit of using a Lady Bird or enhanced life estate deed is placing the property beyond the reach of a Medicaid lien if you received Medicaid benefits during your lifetime which had not been repaid. Again, Texas law may be different on this point than other states, and Texas law could change in the future.

When To Consider Using This Trick

You can use this form of deed at any time. You can take title to property with the enhanced retained life estate only in your name when you first acquire property or change how the title is held to this format at any time prior to your death. I frequently explore the benefits of doing this whenever I visit with clients about their general estate planning. It has become a key tool in making passage of real estate on your death as easy and inexpensive as possible and for the beneficial Medicaid aspects as well. 

How To Get Started 

The use of this estate planning tip is something that should be explored with an attorney because of its potentially huge benefits. If you would like to discuss the possibility of including such transfer in your estate plan, please contact Adair M. Buckner to schedule a free initial consultation*.

*(The free consultation does not cover actual review of documents or giving legal advice on a specific situation.)


Want to find the best attorney to handle your estate planning needs? Download our free whitepaper: 5 Tips For Finding A Lawyer You Can Trust. 

5 tips for finding for finding a lawyer you can trust cta

TESTIMONIALS

Adair is our employment attorney at ROI Online. She is an excellent resource to turn to as we grow and add employees. Adair is not only extremely knowledgeable in her area of employment expertise, but she is also very accessible and quickly responds to our questions and requests.

- Steve -

It is a great pleasure working with Adair. She is very professional and genuinely concerned about your needs. I have complete faith and trust in Adair and will always work with here for my attorney needs.

- Danny -

We appreciate Adair Buckner’s professional and personable service. Our legal needs were met promptly and succinctly. We would not hesitate (and do!) recommend her to our family and friends.

- Kristine -

Trying to get our LLC changed over after moving to Texas was complicated, but Adair Buckner made the process so simple! We just gave her the details, and she handled everything quickly and professionally. Thank you, Adair, for making this part of our move stress-free!

- Barbara -

I needed an attorney I could trust who could handle my legal concerns regarding my mother’s Living Trust. Adair Buckner firmly set things right. She was my voice when I had none and knew how to protect me in the midst of negative chaos. I recommend Adair to anyone seeking justice.

- Debbie -

Adair was very helpful in guiding us through this process of creating our estate planning! She and her assistant were friendly to us each time we met them in their office. I would highly recommend Adair Buckner as an attorney of choice!

- Bruce -

It was way past time to finally get our Wills completed. This was something that was extremely complicated for us, but Adair and her assistant never made us feel like we were bothering them...and we (I) bothered them...a lot! Things were explained to us in a way that we could understand easily. Extremely professional and knows her stuff!

- Darla -

When my husband passed away, I contacted the attorney that we had used to prepare our wills but was unhappy with his attitude of indifference. I discovered Adair Buckner and all of my issues were resolved. Adair is professional, compassionate, and extremely knowledgeable. She saved me a large amount of money by processing my will in the appropriate manner to best suit my situation.

- Susan -