This column first appeared in the San Antonio Express News and other Hearst Newspapers on September 16, 2019.
Dear Mr. Premack: If a married couple signed a Lady Bird Deed and one of them dies, can the surviving spouse revoke the original Lady Bird Deed that gives the house to the children? And can a Lady Bird Deed signed in 2015 have more power over someone’s last will and testament signed in 1999? – DS
Real estate is expensive, often the most expensive thing that a person will buy during their lifetime. If it is your home, it not only has monetary value; it is your refuge and place of safety. Don’t go changing title to your home without the proper legal advice, or you can cause an expensive legal mess that costs a fortune to clean.
A Lady Bird Deed is a legal transfer of title to your home, with the twist that you retain life estate and retain the right to cancel the deed. These are most often used when trying to protect the home from a Medicaid Estate Recovery claim, but can also be used as a probate avoidance tool. The Lady Bird Deed does indeed have more power than the Will of the person who died; the Deed is dominant, and the Will is subordinate.
Here’s the issue: when the house is owned by both husband and wife, and they sign a Lady Bird Deed to pass title to the children, that deed fails to address exactly what happens when one of the spouses dies. The intent may be clear: it should pass to the surviving spouse. But the legal process toward obtaining a clear title in the surviving spouse’s name is not clear at all. The deed addresses what happens when both spouses die, not what happens when just one of them dies.
The worst case scenario, then, is that the Will of the first spouse to die must still be probated in order to transfer title to the surviving spouse. Is there a way to improve the scenario, to avoid probate, and to still have the benefits of the Lady Bird Deed? Yes, Texas law provides a better approach.
The spouses should enter into a Community Property Survivorship Agreement (CPSA) which lists title to the house. Under the provisions of Texas law, the CPSA clearly passes title to the house upon the first death so that the surviving spouse becomes the sole owner without probate. The Lady Bird Deed would then apply at the second death to transfer title to the children, unless the surviving spouse utilizes the right to cancel the children’s rights.
The CPSA can either be a stand-alone document, signed by both spouses and recorded with the county clerk, or it can be integrated into the terms of the Lady Bird Deed. Talk to your legal counsel to decide what approach is correct for you, but by all means seek experienced legal counsel. If you don’t already have an experienced Elder Law attorney, check the website of the Texas Chapter of the National Academy of Elder Law Attorneys (www.NAELA.org/TXNAELA/). You will find a listing of attorneys throughout Texas who focus on issues such as yours.
Paul Premack is a San Antonio Certified Elder Law Attorney, handling wills and trusts, probate, and business entity issues. View past legal columns or submit free questions on legal issues via www.Premack.com.