A Texas transfer-on-death deed, or TODD, and a Lady Bird deed can both help pass a home or land at death. They use different legal rules. Neither promises clear title, tax savings or freedom from every claim.
The right choice depends on the owner, the deed and who should receive the land. Liens and benefit rules can matter too. Ask a Texas lawyer to review those facts before you sign or change a deed.
How does a Texas TODD work?
A TODD names a beneficiary to receive the owner’s share at death. This is the person or entity named to take the land. Texas sets the rules in Estates Code Chapter 114.
The deed must meet the rules for a deed that can be recorded. It must state that the transfer takes effect at death. It must also be filed before the owner dies, in the deed records of the county where the land sits. A signed deed left in a drawer is not enough. See §114.055.
While the owner lives, the TODD gives the named person no current ownership rights. The owner can still sell or mortgage the land. The deed does not remove liens or the rights of people the owner owes. See §114.101.
How does a Lady Bird deed work?
A Lady Bird deed is also called an enhanced life estate deed. It keeps broad powers with the owner during life. It also provides for the land to pass at death. It comes from common law, rather than the specific transfer tool in Chapter 114.
The wording matters. Ask a lawyer which powers the owner keeps, who holds the future interest and how a sale or change would work. The Texas State Law Library compares the two deed types.
Who can sign the deed?
An agent cannot create a Texas TODD through a power of attorney. The owner must have the capacity the law requires. See §114.054.
An agent may be able to create a Lady Bird deed in some cases. The power of attorney must grant the authority needed for that act. Do not assume it permits every gift or deed change. Ask counsel to check both documents.
Can the owner sell or change the plan?
A TODD gives no current ownership share to the person named to inherit. Chapter 114 also has rules for revoking it. A will does not revoke a TODD. See §114.057.
A Lady Bird deed aims to keep broad control with the owner. Its terms and title rules still need review. Before a sale or refinance, ask the title firm what proof or signatures it needs. Do not assume every deed called “Lady Bird” has the same effect.
What if the person named dies first?
A TODD can name a backup beneficiary. By default, the person named must outlive the owner by 120 hours. Other rules can affect a failed share or a deed that names more than one person. See §114.103.
Do not assume a Lady Bird deed has the same backup structure. The State Law Library notes this as a difference between the deeds. Ask who takes the land if the person named dies first. The plan may need another tool to address that risk.
Does either deed promise title insurance?
No. A Texas TODD transfers without a warranty of title, even if the deed says otherwise. See §114.103(d).
A Lady Bird deed may have a general warranty, a special warranty or no warranty. The deed terms control. A warranty is not a title insurance policy. The title insurer still checks ownership, liens and risks before it decides what to insure.
What happens to debts and claims?
A deed does not wipe out a home loan or other existing claim. For a TODD, §114.106 permits certain estate claims against the land if the estate lacks funds. The law covers allowed claims, expenses and family allowances described there.
That section sets a two-year limit to start a case to enforce liability. It does not ban every sale for two years. A title insurer may still require steps to address claim risk before a sale. Talk with the lawyer and title firm about any planned closing.
Do not assume a Lady Bird deed protects the home from all debts or makes a sale automatic.
What about Medicaid and taxes?
Avoiding probate does not resolve every benefit or tax issue. Section 114.106 treats TODD property as nonprobate property for the legal purposes it names. It does not settle every Medicaid or debt issue a family may face.
If the owner gets or may need Medicaid, ask about the exact deed and current benefit rules before acting. Ask a tax adviser about gifts, tax basis and homestead issues too. Neither deed guarantees a tax benefit.
What should you bring to a review?
Bring the current recorded deed, loan and lien records, and any prior TODD or Lady Bird deed. Include the owner’s estate plan. List who should receive the land and who should be the backup. Explain past marriages, co-owners, benefit concerns and plans to sell or refinance.
Our Texas estate planning team can review how a deed fits your plan. If the owner has died, start with a probate consultation before trying to change title.