The pros of a Lady Bird deed include avoiding probate courts, allowing an owner to retain lifetime control of their property, and potentially preserving certain tax advantages available at death.
On the other hand, there are cons of this type of deed, such as limited availability, the potential for family disputes, and the fact that the document is part of the public record.
Marc Whitehead & Associates offers legal help to those interested in Lady Bird deeds. Our Texas estate planning lawyers can discuss Lady Bird deeds, how they work, and their pros and cons. From there, you can make an informed decision on whether a Lady Bird deed is right for you and your family.
Our attorneys are ready to address your concerns and questions about Lady Bird deeds. Or, if you are ready to draft this type of deed, we can help you prepare a document that serves you and your family well now and in the future.
Pros of a Lady Bird Deed
If you are wondering why estate planning is important and whether a Lady Bird deed is worthwhile for you and your family, now is the time to consult with the team at Marc Whitehead & Associates. Initially, our estate planning attorneys can review the specifics of your situation.
Next, we may provide you with insights into the pros of Lady Bird deeds, which can include:
- Avoiding probate: Upon the owner’s death, the property transfers directly to the beneficiaries, bypassing the often time-consuming and costly probate process.
- Retaining control of the property: A property owner maintains full control over the property during their lifetime, and they can sell, mortgage, or change beneficiaries without needing the consent of anyone else. This is a key feature that differentiates this type of deed from traditional life estate deeds.
- Medicaid benefits planning: In some states, a Lady Bird deed can be used for Medicaid planning by helping property pass outside of the probate estate, which can limit Medicaid estate recovery.
- Avoiding gift tax: Because the owner retains the power to revoke or change the deed, creating a Lady Bird deed is typically not treated as a completed gift for federal gift tax purposes.
- Potential capital gains tax benefits: Since the property can receive a step-up in basis upon the owner’s death, beneficiaries may owe less capital gains tax if they later sell the property.
- Protection from creditor claims: The deed allows the property to pass outside the probate estate, and some creditor claims that apply only to probate assets may not affect the property. However, the deed may not protect the property from valid creditor claims during the owner’s lifetime, and creditor rights vary by state.
The attorneys at Marc Whitehead & Associates can assist you with estate planning. As part of our efforts, we can give you insights into the advantages of a Lady Bird deed. In addition, our lawyers will help you weigh the disadvantages of this type of deed and why it’s not necessarily the optimal option in certain circumstances.
For a free legal consultation, call (800) 562-9830
Cons of a Lady Bird Deed
Marc Whitehead & Associates has lawyers on staff who can help you evaluate the advantages and disadvantages of a Lady Bird deed. If you are interested in this type of deed, we want you to understand its cons before you decide to move forward with one.
Below are some of the reasons why people decide against using a Lady Bird deed for estate planning:
- Not available in all states: As of August 2026, these deeds are only authorized and used in five states: Texas, Florida, Vermont, Michigan, and West Virginia.
- Drafting challenges: A poorly drafted deed can lead to improper asset transfers or conflicts between beneficiaries.
- Potential for family disputes: The property owner retains the right to change the beneficiaries at any time, which can lead to conflicts among family members, especially if there is disagreement over those changes or the owner sells or mortgages the property.
- Only applies to real estate: A Lady Bird deed can only transfer real property and cannot be used for other assets, such as bank accounts, vehicles, or personal property.
- Existing mortgages remain in effect: The deed does not eliminate existing mortgages, liens, or other valid encumbrances on the property.
- State law differences: States have varying laws that may affect how this type of deed is treated. For example, some states may allow the property owner to designate the beneficiaries, while others may impose restrictions on property transfers or eligibility for Medicaid.
- Public record: Since the deed is filed in county records, it is part of the public record.
Talk with the estate planning lawyers at Marc Whitehead & Associates about the pros and cons of Lady Bird deeds. Our attorneys can provide resources to help you examine your estate planning options in depth.
Is It Better to Do a Lady Bird Deed or a Trust?
Whether a Lady Bird deed is better than a living trust (revocable trust) or an irrevocable trust depends on the situation. The attorneys at Marc Whitehead & Associates can share information about the pros and cons of Lady Bird deeds and trusts and help you decide between the two.
A Lady Bird deed, also known as an enhanced life estate deed, is a special legal document used in real estate planning, primarily to transfer property upon the owner’s death while avoiding probate.
This deed allows the property owner to retain control over the property during their lifetime but automatically transfers ownership to designated beneficiaries upon death.
Comparatively, a trust is a fiduciary relationship in which an owner (grantor) transfers property to a third party (trustee) to manage for a beneficiary. It is designed to provide asset protection, management, and privacy. Unlike a Lady Bird deed, a trust can cover all types of assets and keeps your asset distribution private and out of county records.
Learn More About the Pros and Cons of a Lady Bird Deed
Estate planning can be complicated. If you rush through the estate planning process, you could wind up making mistakes that prove to be costly for you and your family. Thankfully, you have access to legal advice and support from the estate planning attorneys at Marc Whitehead & Associates.
Our team has 120 years of combined experience. We are familiar with local laws and estate planning and can use what we know to help you assess the pros and cons of using a Lady Bird deed.
As you create an estate plan, we encourage you to speak with an estate planning attorney from our team. This is an opportunity to have a legal professional look for ways to protect your real property, bank accounts, and other assets and investments and consider strategies to help you maintain Medicaid eligibility. To get started, request a case evaluation.
Call or text (800) 562-9830 or complete a Free Case Evaluation form