Estate Planning

The Texas Transfer on Death Deed

Similarities and Differences between Lady Bird Deeds and Transfer on Death Deeds

by Rania Combs

Both Lady Bird Deeds and Texas Transfer on Death Deeds are essentially beneficiary designations for your real estate.  Lady Bird Deeds are a product of common law, whereas Transfer on Death Deeds are product of statute. However, both will allow you to transfer your real estate to your heirs without the need for a probate proceeding.

Similarities between Lady Bird Deeds and Texas Transfer on Death Deeds

Lady Bird Deeds and Transfer on Death Deeds are similar in a number of ways. In addition to transferring your property outside of probate, Lady Bird Deeds and Transfer on Death deeds also:

  1. Do not count as a gift for federal gift tax purposes;
  2. Do not affect homestead rights or tax exemptions;
  3. Allow you to sell or mortgage the property that is subject to the deed without the consent of the remainder beneficiaries;
  4. Provide you with the flexibility to change the remainder beneficiaries at any time;
  5. Protect the property from the creditors of the remainder beneficiaries during your lifetime;
  6. Preserve your ability to immediately qualify for Medicaid benefits;
  7. Allow for a step-up in basis at your death; and
  8. Avoid Medicaid Estate Recovery.

Differences between Lady Bird Deeds and Texas Transfer on Death Deeds

Despite their similarities, they are different in several ways. Below are some of the differences between Lady Bird Deeds and Transfer on Death Deeds:

Two Year Claw Back Period

Texas recognizes that the use of Transfer on Death Deeds can affect the ability of a decedent’s creditors to recover a deceased person’s debt. Therefore, Section 114.106 of the statute allows the personal representative or creditor of the estate to claw back a piece of property that the homeowner transferred by transfer on death deed back into the estate if the homeowner’s estate is not sufficient to the pay the debts of the estate, related taxes, or allowances to the homeowner’s family.

As a result, title companies may be reluctant to insure clear title for two years, until the claims period has expired, or at least until they receive assurances that the deceased homeowner’s debts have been paid.


Ladybird deeds allow homeowners to transfer their interest in the property with warranties, whereas the Texas Transfer on Death Deed statute specifically states that the interest in the property transfers without covenant of warranty of title, even if the deed contains a contrary provision. Therefore, whether the beneficiary of a Transfer on Death Deed will be covered by the grantor’s title policy is uncertain.

Those Authorized to Sign the Deed

The Texas Transfer on Death Deed statute states that only the homeowner can sign a Transfer on Death Deed, whereas no such restrictions exist for a Lady Bird Deed. Therefore, if the homeowner lacks capacity, an agent under a power of attorney cannot execute a Transfer on Death Deed. However, an agent under a power of attorney will be able to execute a Lady Bird Deed if the power of attorney so authorizes.


In order for a Transfer on Death Deed to be valid, it must be signed, notarized, and recorded in the property records of the county where the property is located. In contrast, a Lady Bird Deed does not have a recording requirement. All that is required for a deed to be valid in Texas is delivery to the Grantee.

Note, however, a title company recently refused to accept the validity of a deed my deceased client signed transferring his interest in his home to his trust, arguing that the fact that my client did not record the deed before he died suggested that he may have intended to revoke it.

Lady Bird Deed or Texas Transfer on Death Deed: Which Should You Use?

It depends.

Under most circumstances, a Texas Transfer on Death Deed will accomplish the homeowner’s objectives. However, if the homeowner lacks capacity, there is a concern about future title problems, or a desire to sell the property within the two-year claims period, a Lady Bird Deed may be the better option.

A Caveat

One thing to watch is whether courts will imposing rules that apply to Transfer on Death Deeds on Lady Bird Deeds.

According to legal precedent, if a statute revises the common law, the statute controls. However, the Transfer on Death Deed statute specifically provides that “the statute does not affect any method of transferring real property otherwise permitted under the laws of the state.”

So a question remains about whether courts will interpret Lady Bird Deeds as a “method of transferring real property otherwise permitted under the laws” of Texas. If so, the Transfer on Death Deed statute would not control them. If not, then the rules that apply to Transfer on Death Deeds may be imposed on Lady Bird Deeds.

For example, the Transfer on Death Deed statute permits allows the personal representative  or creditor of the estate to claw a piece of property transferred by Deed, whereas no such rules applies to Lady Bird Deeds. However, I recently learned of a district court case in which a court ruled that a Lady Bird Deed was subject to the claw back provision of the Transfer on Death Deed Statute. The case was not appealed, and it later settled, so there is no appellate court opinion related to this case.

The statute is less than five years old, and cases will flesh out this issue over time. Or perhaps, we will get a more definitive legislative guidance.

It’s always best to get legal advice about your unique situation.

About Rania

Rania graduated magna cum laude from South Texas College of Law Houston and is the founder of Rania Combs Law, PLLC. She has been licensed to practice law since 1994 and enjoys helping clients in Texas and North Carolina create estate plans that give them peace of mind.

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  1. Connie Donehue

    March 2, 2021 at 1:31pm

    I have been married 25 years to a widower.House is paid for now but my name is not on the deed.He did probate her will.How do we put my name on the deed.My husband is 93 now I am 67.I am listed in his will as executive and I get the house. So after he passes then how do I get new deed in my name?

    1. Rania Combs

      March 4, 2021 at 11:30am

      Hi Connie. If the house is bequeathed to you, then it Will pass to you when the Will is admitted to probate. Property can pass outside of probate if a transfer on death deed or Lady Bird deed has been executed.

  2. Charr Moon

    May 10, 2022 at 3:21pm

    My uncle began purchasing his home prior to remarrying a former spouse approximately 1-1/2 thru 2 years before completing its purchase himself AND never added his spouse on the title. When he became severely ill, she declined to care for him and he moved into my home with my family. As a token of his appreciation he wants to gift me his home (which she has continued to reside in, but is not a legal owner on deed of record). We reside in Texas. Would a Ladybird Deed be best for this scenario to avoid probate? He also lists it like this in his will. Thanks.

    1. Rania Combs

      June 6, 2022 at 5:03pm

      Individuals can dispose of their property interests as they choose. A lady bird deed or transfer on death deed would allow the property to pass outside of probate to the intended beneficiary.

  3. Dirk Harrison

    May 10, 2023 at 9:01am

    Very informative article on the lady bird deed. I own two parcels timbered land in SE Texas given to me by father prior to death in my name. I now reside in Florida, married no children and have called one of the county clerks offices for protocol for recording lady bird deed. Your article states no recording required, but also states some kick back from your clients title company. Was the signed stand alone deed accepted by title? Thx

    1. Rania Combs

      June 22, 2023 at 9:30pm

      I recommend recording the deed in the county’s real property records at your earliest convenience. Most counties have websites that provide instructions for mailing the deed, along with fees involved. Most attorneys have the capability to record the deed electronically, which you may also wish to consider.