In re Estate of Turner, No. 06-17-00071-CV, 2017 WL 6062655 (Tex. App.—Texarkana 2017, pet. denied).


Lady Bird Deeds


The decedent executed a warranty deed in which she “reserved during her life, the full possession, benefit and use” of the property “as well as the rents, issues, and profits thereof and the unilateral power of sale of any or all of the [property] with or without the consent of [the remainder beneficiary]” [a Lady Bird deed]. Several years later, the decedent conveyed the same property to her sole member L.L.C. After the decedent’s death, the remainder beneficiary claimed an interest in the property. The trial court granted a summary judgment that the remainder beneficiary had no interest.


The appellate court affirmed. The court rejected the remainder beneficiary’s contentions that the deed was an impermissible restraint on alienation and violated Property Code § 5.041 which authorizes an inter vivos conveyance that commences in the future. The court explained that the deed unambiguously granted a contingent remainder interest and by exercising the power of sale that the decedent reserved in the deed, this remainder interest terminated.


Moral:  A Lady Bird deed operates as intended to transfer a contingent interest to a remainder beneficiary which the grantor may unilaterally terminate.