Section 114.004 of the Estates Code
- This chapter does not affect any method of transferring real property otherwise permitted under the laws of this state.
- Added 84th Leg., R.S., Ch. 841 (S.B. 462)
This section of the Texas Real Property Transfer on Death Act fully adopts the substance of Section 4 of the Uniform Real Property Transfer on Death Act. Cf. Ragland v. Kelner, 221 S.W.2d 357, 359 (Tex. 1949) ("If a grantor delivers a deed to a third person, without any reservation on his part of the right to recall it, and with instructions to the third person to deliver it to the grantee upon the grantor's death, he thereby makes an effective delivery of the deed as a matter of law."); Millican v. Millican, 24 Tex. 426, 444-45 (1859) ("[I]t must be held, that the instruments here in question are not wills, but absolute dispositions by deed; and that they are unaffected by the statute of wills, in force at the time of their execution.").
The section indicates that the TRPTODA is cumulative of other Texas law. Nonetheless, tension exists between the TRPTODA and Section 111.052 of the Estates Code. Cf. In re Estate of Brown, 507 S.W.2d 801, 803 (Tex.Civ.App.—Dallas 1974, n.r.e.) ("A will is generally defined as an instrument by which a person makes a disposition of his property, to take effect after his death, and which by its own nature is ambulatory and revocable during his lifetime."); Eaton v. Husted, 172 S.W.2d 493, 497 (Tex. 1943) ("It is enough to say that Mrs. Eaton . . . reserved no right to revoke the grant and did not attempt to exercise any such right. Therefore, the grant was not testamentary in character.").
Section 111.052, first enacted in 1979, provides that the Estates Code does not invalidate "any provision" in a "conveyance of property . . . or any other written instrument effective as a contract, gift, conveyance, or trust" stating that "property that is the subject of the instrument shall pass [after the decedent's death] to a person designated by the decedent in the instrument or in a separate writing, including a will, executed at the same time as the instrument or subsequently." Cf. Will Substitutes Under the Revised Uniform Probate Code at 1131 ("Read literally, the validating statute states a tautology that has no operative effect. Under a more liberal reading, however, it may operate far beyond its intended scope.").
In use by attorneys in Texas both before and after the effective date of the TRPTODA, Lady Bird Deeds are a nonprobate method of transferring real property. Section 111.052 is the sole statutory support for such deeds, which are in substance ambulatory and revocable during the grantor's life. Cf. Brown v. Payne, 176 S.W.2d 306, 309-10 (Tex. 1943) ("The conclusion we have reached, that the instrument is clearly a will, follows from applying the general law upon the subject of distinguishing wills from deeds."); Roots v. Robertson, 55 S.W. 308, 310 (Tex. 1900) ("[A]n estate may be made to commence in the future by deed, but the deed must vest the right at the present, or it will be construed to be a will.").
The validity of Lady Bird Deeds, also known as Enhanced Life Estate Deeds, is decidedly uncertain. No legislative history or case law exists that directly supports the validity of such deeds in Texas. Cf. Valdez v. Ramirez, 574 S.W.2d 748, 750 (Tex. 1978) ("[H]owever, there are at least four categories of assets known as non-probate assets, not subject to disposition by will and not subject to the rules of intestate distribution."); The Revision of the Texas Probate Code, 43 Tex. B. J. 892, 900 (1980) ("The bill adds Chapter XI to the Texas Probate Code, 'Nontestamentary Transfers.' It is merely a codification of existing Texas case law, organized according to the format of Article 6 of the Uniform Probate Code.").
Senate Bill 462 was amended during the legislative process to clarify that the TRPTODA does not invalidate or otherwise govern Lady Bird Deeds. For details, review the Editor Comments for Section 114.002 and Section 114.003. However, no part of the bill addressed whether Lady Bird Deeds are valid. In other words, whether such deeds are "permitted under the laws of this state." Cf. Hibbler v. Knight, 735 S.W.2d 924, 927 (Tex.App.—Houston [1st Dist.] 1987, n.r.e.) ("[T]he legislature did not intend for this statutory language to validate agreements allowing testamentary disposition of a person's entire estate, including real property, without the requirements of a will or the formalities of will execution.").
The failure of Senate Bill 462 to address whether Lady Bird Deeds are valid is inconsistent with the Uniform Act's intent to bring "uniformity and clarity" to this area of the law. Cf. The Uniform Real Property Transfer on Death Act: A Summary at 1 ("Millions of Americans have benefitted from this trend in modern law to recognize and support the use of will substitutes. However, until recently there was no similarly straightforward, inexpensive, and reliable means of passing real estate directly to a beneficiary at death outside of the probate process. This was a significant gap in the law; for many people in low- and middle-income families a home is the single most valuable asset in their estate.").
No appellate court decision has interpreted any section of the TRPTODA.
- Enhanced Life Estate Deeds at 1 ("One of the biggest downsides to a [Lady Bird Deed] is simply the lack of Texas law regarding this type of deed. . . . Additionally, because there is no statutory authorization for these types of deed, a court decision could greatly change the legal status of LBDs at any time.")
- New Tool in the Toolbox at 1 ("Prior to passage of the [TRPTODA], there were a couple of similar tools: a deed reserving a life estate, and a special revocable deed reserving a life estate (commonly called an enhanced life estate deed or a Lady Bird deed). These deeds still exist and are still in the toolbox.")
- Texas Elder Law (Vol. 51, Texas Practice Series) at 435 ("However, [Section 111.052] is not a model of clear draftsmanship regarding a major issue of public policy. By contrast, the effect of a TODD appears to be well defined in a carefully drafted statute based on a uniform law adopted by several states.")
- Transfer on Death Deed, Survivorship Agreements, Lady Bird Deeds at 6 ("However, the [Lady Bird Deed] has no statutory or known case authority for its use and for such reason title companies have been reluctant to accept the deed or if accepted then often only with additional curative work or documentation.")
- Transfer on Death Deeds: A Texas Primer at 1 ("Transfer on death deeds (hereinafter 'TODDs') were previously authorized under Estates Code § 111.052 . . . . However, this 'bare-bones' provision provided little guidance with regard to the myriad of issues that these type of deeds could raise.")
Uniform Act Text
- Section 4. Nonexclusivity.
- This [act] does not affect any method of transferring property otherwise permitted under the law of this state.
- Approved by ULC in 2009 (Uniform Act)
Uniform Act Comment
The official comments to the Uniform Act provide authoritative commentary regarding the drafters' intent.
For example, the comment to Section 4 states in part:
- This section provides that the act is nonexclusive. . . . As illustrated in these examples, the two methods of transfer have different effects and are governed by different rules.
The full comment is available on the Uniform Law Commission website.