What Is a Lady Bird Deed?
A lady bird deed, formally called an enhanced life estate deed, is a deed in which the owner keeps a life estate in their home plus the power to sell, mortgage, give away, or revoke the property during their lifetime without anyone's permission. At the same time, the deed names remainder beneficiaries who automatically receive the property when the owner dies.
The result looks a lot like a transfer-on-death deed: the owner stays in full control, and the house passes outside of probate at death. The difference is mostly legal mechanics, and the fact that lady bird deeds are recognized in a small number of states.
The name has a popular backstory involving President Lyndon Johnson and his wife, Lady Bird Johnson, though the story is probably more legend than history. The nickname stuck.
Which States Recognize Lady Bird Deeds?
Only a handful of states recognize enhanced life estate deeds:
| State | Basis | Notes |
|---|---|---|
| Florida | Case law and title practice | Interacts with Florida's homestead rules (see below). Florida does not have a TOD deed statute. |
| Texas | Common law and title practice | Texas also allows TOD deeds, so families may see either. |
| Michigan | Case law and Michigan land title standards | Michigan has no TOD deed statute. |
| Vermont | Statute: 27 V.S.A. §§ 651–660 (2020) | The only state with a dedicated enhanced life estate deed statute. |
West Virginia is often included in lists of lady bird deed states. We could not find a West Virginia statute or court decision confirming that, so if the property is in West Virginia, ask a local real estate attorney or title company how the deed will be treated. West Virginia does allow transfer-on-death deeds.
In other states, a deed labeled "lady bird deed" may not work as intended. If you find one for property outside these states, have a title company or attorney review it before relying on it.
What Happens When the Owner Dies
When the owner (the life tenant) dies, their life estate ends and the property vests in the remainder beneficiaries automatically. There is no probate for the house, and in most cases no new deed needs to be signed.
What the beneficiaries inherit:
- The property itself, owned outright, in the shares stated in the deed (equal shares if the deed says nothing else).
- Any mortgage, liens, or other recorded encumbrances. The deed transfers the property, not freedom from what is owed on it.
- The owner's tax basis question, discussed below. Usually this works in the beneficiaries' favor.
What if a beneficiary died before the owner?
It depends on the state and the deed. Many lady bird deeds name alternate beneficiaries. Vermont's statute says a predeceased beneficiary's interest passes to that beneficiary's heirs or devisees rather than lapsing. In other states, read the deed's language carefully and check with a title company, because the answer can determine who signs when the house is sold.
Steps for Beneficiaries After the Owner Dies
1. Find the recorded deed
Search the official records of the county where the property is located for the lady bird deed. Note the recording date and the exact names of the remainder beneficiaries. A lady bird deed should be recorded during the owner's life. Also check whether the owner later recorded a different deed, which could have changed or cancelled the beneficiaries.
2. Get certified death certificates
You will need at least one certified copy to record, plus extras for the mortgage servicer, insurer, and title company. Our guide on how many copies to order can help you plan.
3. Record the death in the county records
The common practice is to record a certified death certificate in the official records of the county where the property sits, which links the owner's death to the deed. In Texas, beneficiaries typically record an affidavit of death along with the death certificate. Vermont's statute does not require any recording after death, though title companies will want proof of death before a sale. The county recorder or clerk can tell you what they accept and what it costs.
4. Notify the people who need to know
- Mortgage servicer: tell them the borrower has died and you now own the property. Federal law generally prevents a lender from calling a residential mortgage due solely because the home passed to a relative at death. Our guide to mortgage assumption after death covers what to ask for.
- Homeowner's insurer: the policy is in the deceased owner's name; get coverage in yours. Vacant homes often need a special policy.
- County property appraiser or tax office: so tax bills come to you. Any homestead exemption the owner had generally ends, and you may be able to apply for your own.
5. Coordinate with the executor
Even though the house passes outside probate, the executor still needs to know about it. It may matter for Medicaid estate recovery, creditor claims, and the estate's tax picture. Our executor responsibilities guide explains what the executor is handling on the probate side.
Florida Homestead Rules
Florida has strong constitutional homestead protections for a surviving spouse and minor children. Florida's homestead rules can affect how a lady bird deed works when the owner leaves a spouse or minor child, and the answer depends on the specific facts.
If the Florida property was the owner's homestead and they left a surviving spouse or a minor child, talk to a Florida probate or real estate attorney before recording anything or selling.
Medicaid Estate Recovery
Lady bird deeds are popular partly because of how they interact with Medicaid. When someone who received Medicaid long-term care benefits dies, the state can try to recover those costs from their estate. Whether a lady bird deed property is reachable depends on how the state defines "estate":
- Michigan limits estate recovery to property subject to probate administration, so a lady bird deed property is outside recovery.
- Florida recovers only from the probate estate.
- Texas has generally treated estate recovery as limited to the probate estate, and its Medicaid eligibility rules have treated qualifying enhanced life estate transfers as not triggering a transfer penalty.
- Vermont's treatment of enhanced life estate deeds for estate recovery is something to confirm directly with the state.
Even in favorable states, the executor should still respond to any estate recovery notice and keep records. Our Medicaid estate recovery guide covers notices, exemptions, and hardship waivers.
Taxes: Stepped-Up Basis
Because the owner kept possession and control of the property until death, the property is generally included in their gross estate for federal tax purposes. The practical upside for beneficiaries is a stepped-up basis: the property's tax basis resets to its fair market value on the date of death.
If you sell soon after inheriting, that usually means little or no capital gains tax. Get a date-of-death appraisal or a broker's opinion of value and keep it with your records. Most estates are far below the federal estate tax threshold, so inclusion in the estate usually has no estate tax cost. See estate tax vs. inheritance tax and taxes on inherited money for the details.
Selling the House
Once the death is recorded, the remainder beneficiaries can sell. A few things to expect:
- Every beneficiary signs. If the deed named three children, all three (or their representatives) need to sign the sale documents. If one beneficiary is a minor or has died, the sale can get more complicated.
- Title insurers may ask for more. Expect requests for the recorded deed, the recorded death certificate or affidavit, and sometimes confirmation that no Medicaid claim or homestead issue exists.
- Disagreements happen. If co-beneficiaries cannot agree on selling, see our guide to handling disputes among heirs.
Lady Bird Deed vs. Other Options
| Lady bird deed | Life estate deed | TOD deed | |
|---|---|---|---|
| Owner can sell or mortgage alone | Yes | No | Yes |
| Owner can change beneficiaries | Yes | No | Yes |
| Avoids probate | Yes | Yes | Yes |
| Where available | FL, TX, MI, VT | Every state | 34 states + DC |
| Stepped-up basis at death | Generally yes | Generally yes | Generally yes |
How SwiftProbate Helps
SwiftProbate is probate task management software. It helps families and executors understand which assets pass through probate and which pass outside it, like a home under a lady bird deed, and keeps the related tasks and documents organized.
For a lady bird deed property, that can mean tracking the recording step, the mortgage and insurance updates, and the Medicaid and homestead questions, alongside everything else the executor is managing. If you are just getting started, our step-by-step probate checklist shows where a non-probate transfer fits.
SwiftProbate provides software to help navigate the probate process. SwiftProbate is not a law firm, does not provide legal advice, and is not a substitute for the advice of a licensed attorney. No attorney-client relationship is created by using this service. Probate laws vary by state and county.