Founding Attorney
Yes. Texas homeowners can use several estate planning tools to arrange for their children to receive a home while retaining the right to live there. Depending on the method you choose, you may also keep the power to sell, refinance, or change who receives the property.
The right choice depends on more than your desire to remain at home. You should also consider probate, taxes, Medicaid, creditor claims, and how much control you want to preserve during your lifetime.
What Estate Planning Options Let You Stay in Your Home?
Texas homeowners commonly consider a Lady Bird deed, a transfer on death deed, a traditional life estate, or a trust. Although each option can help pass real estate to your children, they do not give you the same rights.
Lady Bird Deed
A Lady Bird deed, also called an enhanced life estate deed, names the person who will receive your property when you die. You retain broad control during your lifetime. You can generally continue living in the home, sell it, mortgage it, or cancel the arrangement without your child’s approval.
The property typically transfers outside probate upon your death. A Lady Bird deed may also help keep the home outside a Texas Medicaid Estate Recovery Program claim under current rules. However, Medicaid planning should account for your complete financial situation rather than relying on one deed alone.
Transfer on Death Deed
A transfer on death deed does not give your children a current ownership interest. The transfer occurs only after your death, allowing you to retain your ownership rights while you are alive.
You may sell or refinance the home, revoke the deed, or record a new deed naming different beneficiaries. A valid transfer on death deed must meet Texas requirements and be recorded in the county where the property is located before your death.
The beneficiary receives the property subject to existing mortgages, liens, and certain creditor claims. Those claims can sometimes complicate a later sale.
Traditional Life Estate
A traditional life estate deed gives you the right to occupy and use the home for the rest of your life. Your children receive a remainder interest immediately and become full owners when you die.
This option can limit your flexibility. You may need the remainder beneficiaries’ cooperation to sell or refinance the property. Their creditor, divorce, or financial problems could also affect their interests. Because the transfer is generally permanent, a traditional life estate requires careful thought before signing.
Revocable Living Trust
You may transfer the home into a revocable living trust and state who should receive it after your death. As trustee, you can usually continue controlling the property and revise the trust while you have capacity.
A trust may be helpful if you want detailed instructions for the home or need a plan for managing it during incapacity. However, the deed must transfer the property into the trust for the plan to work as intended.
What Are the Benefits of Planning the Transfer in Advance?
A properly selected and prepared estate planning tool can:
- Allow the home to pass without a full probate proceeding
- Preserve your ability to live in the property
- Clarify which child or children will receive it
- Reduce the risk of ownership disputes after your death
- Coordinate the property transfer with the rest of your estate plan
Avoiding probate does not eliminate every issue. Your children may still need to record documents, address liens, maintain insurance, or resolve shared ownership questions.
What Should You Consider Before Transferring Your Home?
Do not simply add a child to your current deed without reviewing the consequences. An outright transfer can give that child immediate ownership rights, expose the property to the child’s creditors, and reduce your control.
We recommend considering:
- Whether you may need Medicaid-funded long-term care
- Whether you might sell or refinance the home
- How the transfer could affect property taxes and exemptions
- Whether your children can manage shared ownership
- What should happen if a beneficiary dies before you
- Whether the plan may create gift or capital gains tax concerns
Your mortgage, marital status, ownership structure, and existing estate planning documents can also affect which approach works.
Protect Your Home While Planning for Your Children
Your home may be both a valuable asset and the place where you intend to spend the rest of your life. The deed or trust you choose should protect your right to remain there while supporting your broader goals.
The Law Office of Carey Thompson, PC can review your property, family circumstances, and long-term care concerns. We will help you compare your options and prepare an estate plan that preserves appropriate control. Contact us to discuss how you want your Texas home to pass to your children.