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San Antonio Express-News
Copyright 2012, Paul Premack
March 19, 2012

Does Life Estate Deed allow son to run cattle on dad’s land?

Dear Mr. Premack: My father left me land and a house in a Life Estate. He kept the right to live there till his death and any proceeds the land may incur such as lease money. He is not living on the property and I want to clear shrubs and trees from the land and use it for cattle. Can he stop me from using the land? – BM
From your description, it sounds like your father used a traditional Life Estate arrangement. Under it, Texas Law says that he retains all control, use and enjoyment of the property so long as he is alive. Texas Law further states that at the moment of his death, all those rights are transferred to you instantly. But so long as he is alive, Texas Law states your rights are extremely limited: you can veto the sale of the property and you are entitled to ownership upon his death. You have no right to enter the property without his consent. You have no right to clear shrubs and trees without his consent. You have no right to run cattle on the land without his consent. Thus, your best plan may be to seek his consent, and perhaps lease the land from him under an agreement that terminates at the moment of his passing.
Dear Mr. Premack: My parents left me their property via a Lady Bird Deed, but my sister lives in the house and has for over a year, and she has not worked in years nor cared for my parents. I am the only one on the Lady Bird Deed, but I understand if my mom was receiving Medicaid the state of Texas will go after the property. The Elder Law Attorney we saw in 2008 told us this would protect the property from estate recovery. Now I read on-line that the State of Texas will come after the property to recover Medicaid funds spent on my mom anyway and the Lady Bird Deed does not protect the property from having to be sold with the money being returned to the state UNLESS a son or daughter has been living at the home for over a year with no income. Is this true? – ADC
A Lady Bird Deed is an expanded form of Life Estate. Your mother has all the rights that exist under a traditional Life Estate arrangement as well as the right to sell the property and to cancel your right to inherit during her lifetime. This arrangement is used under the Medicaid system to avoid MERP (the Medicaid Estate Recovery Program) because the arrangement avoids transfer penalties under the Medicaid rules.
MERP itself has limited legal rights under Texas law. They may bring a claim to recover money spent by the state on a Medicaid patient (like your mother), but that claim may only be brought in probate court after the patient dies when his or her Will is admitted to probate. The claim is paid from the deceased patient’s remaining assets, which may require that the house be sold so the claim can be satisfied.
A Lady Bird Deed transfers title to the house without reference to a Will and without probate. Thus, the state has no forum in which to bring a claim, and the deceased patient legally does not own the house after the moment of death. Whatever you read on-line was incorrect; the State of Texas still reluctantly honors Lady Bird Deeds as a MERP avoidance technique because the law limits the State’s options. Your reference to “a son or daughter” living in the house for over a year with no income is an inaccurate mash-up of other legal ways to avoid MERP. Check chapter 3 of my book The Senior Texan Legal Guide (edition 5.1, at for those exceptions.
Dear Mr. Premack: After nearly forty years, I am recently divorced. Part of the divorce agreement was that my (now) ex-husband has to pay support to me. Does that support have to be included in my income? VF
I would suggest you ask your accountant, but Federal law states that routine support payments received pursuant to a divorce decree are taxable to the recipient, and deductible by the payor. Further, there are Federal tax rules that require the payments to be in cash or its equivalent, that you and your ex- cannot reside in the same household, and that you cannot file joint returns. On the other hand, assets transferred pursuant to the divorce (like bank account balances or real estate title) are not included in your taxable income.

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Next Week: Did husband create Community Property with gift?

Disclaimer: This column answers a specific legal question asked by an individual in Texas. The answer may or may not match your individual situation. Be careful not to treat this column as specific legal advice, as it may not meet your individual needs. It may give you a solid basis for discussion with your own attorney.  You should consult with your personal attorney before you take any action on this or any legal issue. Also, please be aware that laws change, so  this column is valid only as of the date it was published. This communication does not create an attorney-client relationship between the author and the reader.