Dear Mr. Premack: My question concerns the Lady Bird deed. I
have read your previous columns about this. I own a home that my wife
of 57 years and I built. She died 5 years ago, and I remarried 3 years
ago. I plan to deed this property to my children using the Lady
Bird. Does the law concerning widows give any rights to my current
wife? It is my separate property. – J.H.H.
When a married
couple purchases or builds a home using funds earned during the
marriage, that home is their community property. You and your first
wife would have owned the home as community property. Your first wife
died five years ago, and some issues you did not mention is whether
she had a Will, whether it was probated, or if she died intestate.
If your first wife had a Will, if the Will left her half of the
house to you, and if the Will was properly probated after her death,
then you now own 100% of the house. But if she had no Will, or if her
Will did not leave her half to you, or if her Will was not probated,
then the question “who owns your first wife’s half of the house?”
cannot be answered without more investigation.
wife has no ownership interest in the house – she was not involved
until you married her three years ago – but your first wife’s heirs or
children may have an ownership interest if your firs wife’s Will was
not handled correctly. You do say “It is my separate property” so I am
going to assume that your first wife’s half of the house did legally
pass to you upon her death (but again, if it did not, then you must
fix the ownership problem).
Since your second wife has no
ownership interest, you can dispose of the house in any manner you
desire with one limitation: you must take into account your second
wife’s homestead rights under Texas law. Yes, Texas law concerning
widows (better said: surviving spouses) does give rights to your
second spouse. She has the legal right to occupy the home after your
death. Even if you leave ownership to someone else (like your
children) they cannot interfere with her occupancy of the house. She
is allowed to reside there until she voluntarily vacates the premises
or until her death.
The Lady Bird deed is, when written
properly, a fast way to transfer ownership of the house to your
children while 1) reserving to yourself “life estate”, 2) reserving to
yourself the right to revoke the deed, and 3) providing protection for
the house from the Medicaid Estate Recovery Program, in the event that
you are even in a nursing home which is being paid for under the
Texas law does not allow you to encumber
your homestead without your spouse’s agreement and joinder. She can
voluntarily waive her rights in a written agreement, giving up all of
her homestead rights. Otherwise, if you desire the Lady Bird deed to
be valid, she will need to sign the Lady Bird deed to show that she
accedes to its terms, even though she has no ownership interest in the
house. And when you eventually die, she will have the right to
continue to occupy the house even though the deed leaves legal
ownership to your children.
During the period of her
occupancy, there are complex issues that must be addressed. For
instance, how will the real estate taxes be paid, and by whom? Who
will pay to insure the premises, or pay for repairs when necessary?
There are laws that provide answers, but it is always better if your
second wife and your children have a written agreement in place before
you die. A Lady Bird deed, while a good tool in some situations, is
NOT a good place to address those issues. You, your second wife, and
perhaps your children should all visit with a Certified Elder Law
Attorney before you take any action regarding the Lady Bird deed and
associated legal issues.