iNFORMATION
Texas Transfer on Death Deed
What is a Transfer on Death Deed in Texas?
A Transfer on Death Deed (or, TODD for short) is allowed for under Texas law by the Texas Real Property Transfer on Death Act. Simply put, a Transfer on Death Deed is a deed that a property owner signs during their lifetime that does not transfer the interest in the property until the transferring owner dies.
More specifically, this allows the property owner of real property to designate a beneficiary to receive title to the property on the owner’s death without the necessity of probate. For older folks who only have one piece of real estate (usually their homestead) — this affords for an effective way of transferring the title without the attendant costs of a full probate in a Texas Court with a probate judge.
Is there a Transfer on Death Deed form?
While undoubtedly someone searching on the internet could find a transfer on death deed form, this is an exercise fraught with peril. As the old saying goes, “an ounce of prevention is worth a pound of cure,” so it goes with any legal document that you intend to use after someone dies. You are far better served having your specific transfer on death deed form prepared for you by a licensed Texas probate attorney who is well versed in TODD deeds.
The specific transfer on death deed form utilized should be tailored to the property owner’s specific property, and designating specific beneficiaries for the house, and in a specific order of priority. There are certain legal requirements that are not readily apparent to lay people.
Does Texas allow for Transfer on Death Deeds?
Yes.
Does a Transfer on Death Deed have to be filed/recorded before death?
Yes, any owner who signs a TOD deed has to record it before they die. I personally have done probate consults with individuals whose parent already signed a transfer on death deed, but they still had to do probate in Texas since it was not recorded or filed prior to the owner’s death.
Can I avoid probate if I sign a Transfer on Death Deed?
Yes, but your are not done just by doing your TOD deed. It depends on what other preparations you have made. Even if you have a TODD deed, you still need to make sure that all your other assets are set up to take care of themselves after your pass away. For example, you should also set up all your financial accounts as payable on death to a beneficiary. You can also now do this for your vehicles in Texas, too. That way, if all that is left is your “stuff,” then your family can divide that up according to your wishes expressed in your Last Will & Testament.
Should I still get a Will if I have a Transfer on Death Deed?
Yes, it is still a good idea to have a Will. This would be a good backup for any assets you failed to set up properly prior to your death. It would also address any disputes between family members over your property. And, most importantly, a Will prepared at an attorney’s office will always include important ancillary documents that are just as important as the Will (i.e. Medical Power of Attorney, Statutory Durable Power of Attorney, and Directive to Physicians).
Can I revoke my Transfer on Death Deed?
Yes, a transfer on death deed is revocable regardless of whether the deed or another instrument contains a contrary provision. This means that your TODD deed overrides what a Will says. This is because a Transfer on Death Deed is what is legally known as a nontestamentary transfer?
What is a nontestementary transfer?
This is a transfer of an asset that does not go through probate, and therefore not according to a Will. The transfer designation is typically made through beneficiaries designated. This occurs with life insurance, bank accounts, other financial accounts (e.g. 401k’s and IRA’s), and — now — Transfer on Death Deeds!
Will I lose my homestead tax exemption?
No, Texas Property Code Sec. 114.101 says that it will not. Your homestead exemption is safe. Additionally, Section 114.101 provides the following:
Sec. 114.101. EFFECT OF TRANSFER ON DEATH DEED DURING TRANSFEROR’S LIFE. During a transferor’s life, a transfer on death deed does not:
(1) affect an interest or right of the transferor or any other owner, including:
(A) the right to transfer or encumber the real property that is the subject of the deed;
(B) homestead rights in the real property, if applicable; and
(C) ad valorem tax exemptions, including exemptions for residence homestead, persons 65 years of age or older, persons with disabilities, and veterans;
(2) affect an interest or right of a transferee of the real property that is the subject of the deed, even if the transferee has actual or constructive notice of the deed;
(3) affect an interest or right of a secured or unsecured creditor or future creditor of the transferor, even if the creditor has actual or constructive notice of the deed;
(4) affect the transferor’s or designated beneficiary’s eligibility for any form of public assistance, subject to applicable federal law;
(5) constitute a transfer triggering a “due on sale” or similar clause;
(6) invoke statutory real estate notice or disclosure requirements;
(7) create a legal or equitable interest in favor of the designated beneficiary; or
(8) subject the real property to claims or process of a creditor of the designated beneficiary.
Who can I call to get my TODD Deed?
We are Texas probate lawyers and can help you with any real estate in Texas that you want to transfer via a Texas Transfer on Death Deed. We can do the entire process through email and electronically record your deed. Please give us a call or email when you are ready. Take care and stay safe.
Can I avoid probate if I sign a Transfer on Death Deed?
Yes, but your are not done just by doing your TOD deed. It depends on what other preparations you have made. Even if you have a TODD deed, you still need to make sure that all your other assets are set up to take care of themselves after your pass away. For example, you should also set up all your financial accounts as payable on death to a beneficiary. You can also now do this for your vehicles in Texas, too. That way, if all that is left is your “stuff,” then your family can divide that up according to your wishes expressed in your Last Will & Testament.
Should I still get a Will if I have a Transfer on Death Deed?
Yes, it is still a good idea to have a Will. This would be a good backup for any assets you failed to set up properly prior to your death. It would also address any disputes between family members over your property. And, most importantly, a Will prepared at an attorney’s office will always include important ancillary documents that are just as important as the Will (i.e. Medical Power of Attorney, Statutory Durable Power of Attorney, and Directive to Physicians).
Can I revoke my Transfer on Death Deed?
Yes, a transfer on death deed is revocable regardless of whether the deed or another instrument contains a contrary provision. This means that your TODD deed overrides what a Will says. This is because a Transfer on Death Deed is what is legally known as a nontestamentary transfer?
What is a nontestementary transfer?
This is a transfer of an asset that does not go through probate, and therefore not according to a Will. The transfer designation is typically made through beneficiaries designated. This occurs with life insurance, bank accounts, other financial accounts (e.g. 401k’s and IRA’s), and — now — Transfer on Death Deeds!
Will I lose my homestead tax exemption?
No, Texas Property Code Sec. 114.101 says that it will not. Your homestead exemption is safe. Additionally, Section 114.101 provides the following:
Sec. 114.101. EFFECT OF TRANSFER ON DEATH DEED DURING TRANSFEROR’S LIFE. During a transferor’s life, a transfer on death deed does not:
(1) affect an interest or right of the transferor or any other owner, including:
(A) the right to transfer or encumber the real property that is the subject of the deed;
(B) homestead rights in the real property, if applicable; and
(C) ad valorem tax exemptions, including exemptions for residence homestead, persons 65 years of age or older, persons with disabilities, and veterans;
(2) affect an interest or right of a transferee of the real property that is the subject of the deed, even if the transferee has actual or constructive notice of the deed;
(3) affect an interest or right of a secured or unsecured creditor or future creditor of the transferor, even if the creditor has actual or constructive notice of the deed;
(4) affect the transferor’s or designated beneficiary’s eligibility for any form of public assistance, subject to applicable federal law;
(5) constitute a transfer triggering a “due on sale” or similar clause;
(6) invoke statutory real estate notice or disclosure requirements;
(7) create a legal or equitable interest in favor of the designated beneficiary; or
(8) subject the real property to claims or process of a creditor of the designated beneficiary.
Who can I call to get my TODD Deed?
We are Texas probate lawyers and can help you with any real estate in Texas that you want to transfer via a Texas Transfer on Death Deed. We can do the entire process through email and electronically record your deed. Please give us a call or email when you are ready. Take care and stay safe.
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