Q: In tx if your loved one had a lady bird deed with a house with a reverse mortgage can you skip probate?

A: The lady bird deed automatically transfers ownership of the house to the beneficiary(ies) named in the deed, subject of course to the reverse mortgage. It is not necessary to probate the decedent's estate to transfer the house.

The beneficiary(ies) need to pay off the reverse mortgage. Upon the death of the borrower, the balance has become due and payable. The decedent's personal liability now becomes the liability of the decedent's estate. Presumably, the decedent does not have other assets with which to pay off the mortgage, or you would likely be probating the decedent's estate. So to prevent a trustee's sale of the house, the beneficiary(ies) simply need to ask the mortgage company what the balance is and make the appropriate financial arrangements to promptly pay off that balance in full.

A: With a ladybird deed in Texas you do actually bypass probate. The name of the beneficiary becomes the owner of the property upon the death of the grantor. One problem I've realized with any outstanding mortgage is that while the beneficiaries do own the home, they never entered into the contract with the lender, and therefore, the lender ignores the beneficiary because they have no legal connection to the beneficiary. Therefore, the beneficiaries may need to sell the home and, at that time, during the closing, have the title company get data from the lender and pay them in full, with the balance going to the beneficiaries. If the lender proceeds to foreclosure, do not worry for no reason. It will likely take the lender multiple months to get to the point of being ready to sell at foreclosure, and in reality, the beneficiaries can pay the lender off at any time prior to any actual sale.