A Lady Bird deed, formally an enhanced life estate deed, is one of the most useful tools in Texas for an older homeowner. You deed your El Paso home to your children or other beneficiaries, called remaindermen, but you reserve a life estate with the enhanced power to sell, mortgage, lease or give away the property without their permission and to change your mind at any time. Because the property passes automatically at your death, there is no probate. And because you never gave up control, the transfer is not treated as a gift for Medicaid purposes and the home is generally outside the reach of the Texas Medicaid Estate Recovery Program.
Unlike the transfer on death deed in Texas Estates Code Chapter 114, the Lady Bird deed is not created by a specific statute; it rests on long-standing Texas property law recognizing life estates with a reserved power of sale, and it is accepted by Texas title companies and by the Texas Health and Human Services Commission. The Medicaid Estate Recovery Program, authorized by the Texas Government Code and administered under 1 Texas Administrative Code Chapter 373, may recover long-term care costs only from a deceased recipient's probate estate. Property that passes outside probate through a Lady Bird deed is not part of that estate. Federal law, 42 U.S.C. Section 1396p, sets the framework for Medicaid transfer penalties, and a reserved enhanced life estate is not a countable transfer under Texas eligibility rules.
Robert Navar reviews the El Paso County deed records to confirm how you hold title, drafts the enhanced life estate deed with the exact reservation language title companies expect, and has you sign before a notary at our office. We record the deed with the El Paso County Clerk and provide the file-stamped copy and instructions for your beneficiaries. No court is involved now or after your death. Generic forms from other states often omit the power-of-sale reservation, which turns the document into an ordinary life estate deed that does trigger a Medicaid transfer penalty and does require the children's signatures to sell. Getting the wording right is the entire point.
Who should consider a Lady Bird deed in El Paso
The typical client is a homeowner over 60, or a person with a chronic illness, who wants the house to go to the children without probate and who may someday need Medicaid to pay for nursing home or in-home care. It also suits parents who want to keep the over-65 homestead tax freeze from the El Paso Central Appraisal District, since they remain the owner for tax purposes. It is less suitable when the beneficiaries are minors, when there are many beneficiaries who may not agree on a sale after your death, or when you want to control how the property is used after you die; a trust handles those situations better.
Tax basis, homestead and what happens at death
Because the home stays in your estate for federal tax purposes, your beneficiaries receive a stepped-up basis to the value at your death, which can eliminate capital gains tax if they sell. Your homestead exemption and any over-65 or disability exemptions continue unchanged. At death, the remaindermen record your death certificate and an affidavit in the El Paso County real property records, and title is theirs. The deed is fully revocable during your life by recording a new deed, and it is a good idea to revisit it after a marriage, divorce or the death of a named beneficiary.
What's included
- Consultation in English or Spanish covering Medicaid, homestead and family goals
- Review of your current deed and El Paso County property records
- Enhanced life estate (Lady Bird) deed with reserved power of sale and alternate remaindermen
- Notarized signing at our El Paso office
- Recording with the El Paso County Clerk and delivery of the file-stamped deed
- Affidavit of death form and written instructions for your beneficiaries
- Comparison with a transfer on death deed so you choose the right instrument
How it works
Consultation and title check
We discuss your health, family and long-term care concerns, then pull the El Paso County deed to confirm ownership and any liens. You receive a flat-fee quote before we draft anything.
Drafting and review
Robert Navar drafts the enhanced life estate deed naming your remaindermen and alternates, explains the reserved powers in plain language, and adjusts anything you want changed.
Signing and recording
You sign before our notary at the El Paso office. We record the deed with the El Paso County Clerk and give you the stamped copy and beneficiary instructions.