Transfer on Death Deed vs. Lady Bird Deed: What Is the Difference?

Are a Transfer on Death Deed and a Lady Bird Deed the same thing? The short answer is: No, they are not.

If you live in a state like Florida, you might hear these terms used interchangeably. It is very common for people to conflate the two concepts, assuming they are identical tools for estate planning. While they share similarities in how they transfer property, there are critical legal and practical differences you need to know.

Below, we break down exactly how these two deeds differ regarding their origin, creditor protections, and availability.

Quick Summary: The Key Differences

If you are looking for a quick answer, here is the breakdown of the major distinctions between these two property transfer methods:

Feature	Transfer on Death Deed (TODD)	Lady Bird Deed
Origin	Created by Statutory Law (Statutes)	Result of Case Law
Creditor Claims	2-Year Clawback Period: Creditors can undo the transfer if the estate lacks funds.	No Clawback: Once passed, it is a "done deal." Creditors cannot undo it.
Power of Attorney	Not specified in text	An agent can sign on behalf of the owner (if the POA specifically allows it).
Availability	Available in approximately 30 states	Available in only 5 states (including Florida)

1. How They Were Created: Statutes vs. Case Law

The first difference lies in the legal foundation of the deeds.

• Transfer on Death Deeds came about through statutory law. This means there are specific written laws (statutes) in place that describe exactly how the deed must be done in that state.

• Lady Bird Deeds, by contrast, are the result of case law. They evolved through court decisions rather than being created by a specific legislative statute.

2. The "Clawback" Period: A Major Risk Factor

Perhaps the most significant difference involves creditors and debt.

With a Transfer on Death Deed, there is a two-year clawback period. If the original owner passes away and their estate does not have enough money to pay off expenses or creditors, a creditor can force the return of the property. They have a two-year window to "undo" the transfer to get paid out of the property's value.

This is not the case with Lady Bird Deeds.

If a property passes to a beneficiary through a Lady Bird Deed, it is considered a "done deal." Creditors cannot come back and claw the property back to satisfy debts. This offers a distinct advantage in protecting the asset.

3. Signing via Power of Attorney

Flexibility in signing is another key factor. For a Lady Bird Deed, an agent acting under a Durable Power of Attorney is permitted to sign the deed on behalf of the person giving the property away.

Note: The Power of Attorney document must specifically allow for this action. If the document says it is okay for the agent to execute or sign a Lady Bird Deed, they are legally permitted to do so.

4. State Availability

Finally, where you live matters. Because Lady Bird Deeds offer significant advantages regarding creditor protection, they are much rarer.

• Transfer on Death Deeds: Currently available in about 30 states.

• Lady Bird Deeds: Currently available in only 5 states (Florida is one of the few that allows them).

If you reside in one of the five states that offer Lady Bird Deeds, you are considered "very lucky" due to the advantages they hold over standard Transfer on Death Deeds.

Need a Lady Bird Deed?

If you are located in Florida and want to ensure your property is protected from creditor "clawbacks", do not leave your estate planning to chance. Our estate planning attorneys at atCause Law Office are here to ensure your deed is handled correctly and your assets are secure.

Schedule a Free Consultation