Lady Bird Deeds in Texas: Understanding the Drawbacks and the Complexities of Multiple Beneficiaries

Lady Bird Deeds, also known as enhanced life estate deeds, are a powerful and popular tool in Texas estate planning. They allow property owners to retain full control of their real estate during their lifetime while ensuring a seamless transfer to beneficiaries after death — all without going through probate.

We previously explored their advantages in our post, Texas Estate Planning: The Power of Lady Bird Deeds, which covered benefits such as flexibility, privacy, and protection from Medicaid estate recovery.

But like all estate planning tools, Lady Bird Deeds come with important limitations and nuances. Below, we’ll unpack the most common questions we hear:

 What are the disadvantages of a Lady Bird Deed in Texas?

 and

 Can a Lady Bird Deed have multiple beneficiaries?

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Disadvantages of a Lady Bird Deed in Texas

While Lady Bird Deeds offer substantial benefits — especially for asset preservation and Medicaid eligibility — they also have several notable drawbacks that every Texas homeowner should understand before choosing this option.

1. Limited to Real Property

A Lady Bird Deed only applies to real estate. Other assets, such as savings, investment accounts, and personal property, must still be addressed through a Will, Trust, or other estate planning instruments. Without a coordinated plan, those assets may still go through probate.

2. No Contingent Planning

Unlike a detailed Will, a Lady Bird Deed cannot control what happens if a beneficiary passes away before the grantor. In that case, the property may not transfer as intended, leaving uncertainty or forcing additional legal steps for heirs.

3. Title Company Hesitation

Some Texas title insurance companies are reluctant to insure property associated with Lady Bird Deeds — particularly when multiple remainder beneficiaries are involved. This hesitation can cause delays or complications during a sale or refinance.

4. No Statutory Form

Texas law recognizes Lady Bird Deeds, but there is no standardized statutory form. Because each deed must be custom-drafted, errors or vague language can create problems later , particularly when a title company or court reviews the document after the owner’s death.

5. Guardianship Issues for Minors

If a minor is named as a remainder beneficiary, the Lady Bird Deed does not automatically create guardianship for that child. A separate guardianship appointment or trust must be established to ensure the minor’s share is properly managed.

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Lady Bird Deeds and Multiple Beneficiaries

Can a Lady Bird Deed have multiple beneficiaries? Yes — but doing so often introduces more complexity than benefit.

When there are multiple remainder beneficiaries, the property passes to all of them jointly after the grantor’s death. From there, several complications can arise:

• Unanimous consent is required for any sale or transfer of the property.

• If one beneficiary disagrees, the property cannot be sold unless legal action is taken.

• If beneficiaries decide to retain the property, they must co-manage it — sharing taxes, maintenance, and decisions.

  
  

This arrangement can easily lead to disputes, particularly in blended families or situations with strained relationships.

For those wishing to leave property to multiple beneficiaries, a Revocable Living Trust is often a better fit. As discussed in our post Maximizing Your Estate: The Power of a Revocable Living Trust, a trust provides flexibility, structure, and clear guidance for dividing or selling property without requiring unanimous agreement.

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Secure Your Real Estate Legacy

Lady Bird Deeds can be an excellent tool for retaining control, protecting assets, and avoiding probate, but they’re not a one-size-fits-all solution. Their limitations regarding multiple beneficiaries, lack of contingent planning, and reliance solely on real property mean they work best as part of a broader estate plan, not a standalone solution.

An experienced estate planning attorney can help determine whether a Lady Bird Deed aligns with your long-term goals and family dynamics. At The Patterson Law Firm, we guide Texans through every aspect of estate planning — from drafting Lady Bird Deeds to designing comprehensive Wills and Trusts that reflect your wishes.

Schedule your free 30-minute consultation today to discuss whether a Lady Bird Deed is right for your situation.

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