Texas Transfer on Death Deeds

Everything you need to know about transfer on death (TOD) deeds in Texas.

A transfer on death (TOD) deed is like a regular deed you might use to transfer your Texas real estate, but with a crucial difference: It doesn't take effect until your death. At your death, the real estate goes automatically to the person you named to inherit it (your "beneficiary"), without the need for probate court proceedings. (Tex. Est. Code §§ 114.001 and following.)

You must sign the deed and get your signature notarized, and then record (file) the deed with the county clerk's office before your death. Otherwise, it won't be valid.

How the TOD Deed Works

The beneficiary's rights. The person you name in the deed to inherit the property doesn't have any legal right to it until your death—or, if you own the property as "joint tenants" or "with right of survivorship" with someone else, until the last surviving owner dies. (More on this below.) The beneficiary doesn't sign the deed, but it's a good idea to let the beneficiary know you've recorded it. Otherwise, he or she might not know about it, even after your death.

Earlier wills or TOD deeds. If you have made a will or previous TOD deed that leaves the property to someone, your new TOD deed will override it.

Your rights. You keep complete ownership of, and control over, the real estate while you're alive. You pay the taxes on it, and it's not protected from your creditors. You can sell it, give it away, or mortgage it. Because you're not making a gift of the property, there's no federal gift tax.

Medicaid. Creating a TOD deed won't affect whether or not you are eligible for Medicaid. Because you own the property and are not actually giving it away during your lifetime, a TOD deed won't help you "spend down" your assets to help you qualify for Medicaid. In Texas, using a TOD deed might protect your house from Medicaid estate recovery; a TOD avoids probate, and Medicaid recovery is currently limited to probate property. If you have questions, consult a local attorney.

Other creditor claims. Even though your TOD deed transfers your property outside of probate, if your probate property isn't enough to satisfy certain creditor claims and family allowances (certain amounts your spouse and children are entitled to at your death, set out by law), your beneficiary might be liable for these claims, up to the value of the property.

Revoking the deed. If you later change your mind about who you want to inherit the property, you are not locked in. You have two options: (1) sign and record a revocation or (2) record another TOD deed, leaving the property to someone else. You cannot use your will to revoke or override a TOD deed.

Divorce. If you name your spouse as a beneficiary on your TOD deed and then you get divorced, the TOD deed is not automatically voided by the divorce; the TOD deed remains valid and your spouse remains the beneficiary. If that is not the result you want, you must take action. You can do this by recording the final judgment of the court dissolving the marriage (the divorce decree) in the county clerk's office where the TOD deed is recorded, or you can revoke the old deed and make a new one. (Tex. Est. Code § 114.057(c).)

How ownership is transferred. To get title to the property after your death, the beneficiary typically records an "affidavit of death" (a sworn statement) and a certified copy of the death certificate in the county clerk's office. No probate is necessary.

Power of attorneys. An agent cannot create a TOD deed on your behalf, even if you have a power of attorney that authorizes the agent to act in your place. (Tex. Est. Code § 114.054(b))

Special Rules for Co-Owned Property

If you own the property with someone else, how to proceed depends on how you and the other co-owners hold title to the property. If you don't know how you hold title, start by looking at the deed that transferred the property to you. It might say, for example, "to Ellen Bauman and Edward M. Bauman, as husband and wife" or "to Jonathan G. Costa and Sandra L. White, as tenants in common."

There are several ways to co-own property in Texas, and they affect how a TOD deed works. Here are the details:

Tenancy in common. If your deed doesn't state how you own the property, you and your co-owners are presumed to own it as tenants in common, unless you've agreed otherwise in writing. If you own your property as a tenant in common, it's best to create a TOD deed on your own (without the other tenants in common). That TOD deed will transfer only your share of the property to the TOD beneficiary when you die.

Example: Raymond and Jack, who are brothers, own a house together as tenants in common. Raymond signs a TOD deed that leaves his half-interest to his daughter. At Raymond's death, his daughter will become a tenant in common with Jack.

Joint tenancy with right of survivorship. When two people co-own a property with a "right of survivorship," after one of the co-owners dies, the other co-owner will automatically own the property. You can make a TOD deed together with the other joint tenant(s) or you can make one on your own, but it's important to understand the difference.

When you make a TOD deed together with the other joint tenant(s), you are naming someone to receive the property after all of the joint tenants have died.

Example: Claire and Kendra co-own their home as joint tenants. They make a TOD deed together and name Oscar as the beneficiary. When Claire dies, Claire's half of the home goes to Kendra, who becomes the sole owner of the entire home. When Kendra dies, the home goes to Oscar under the TOD deed.

If you make a TOD deed on your own, without the other joint tenants, the deed will be effective only if you are the last surviving owner of the property. If you die first, the surviving co-owner(s) will own the property, and the TOD deed won't have any effect.

If you want to transfer only your share of the property, you can first change the joint tenancy into a tenancy in common, by preparing and recording a deed to that effect. (You'll need a quitclaim or grant deed, not a TOD deed.) Then you could use a TOD deed to leave just your interest in the property.

Married couples. Texas real estate acquired by a married person is generally the couple's community property, even if the deed doesn't say so. (Only married couples can hold title as community property.) There are two types of community property, one that comes with the right of survivorship, and one that does not. If the deed is silent, the couple owns the property simply as community property, and there is no right of survivorship.

Community property. Community property operates like a tenancy in common (see above). You are free to leave your half-interest in the property to whomever you like by signing a TOD alone. But if you want your spouse to own the entire property after your death, and vice versa, you and your spouse should each create separate TOD deeds that name each other as the primary beneficiary.

Community property with right of survivorship (CPWROS). This form of community property (you will know if it applies to you because the deed that transferred the property to you and your spouse will specify a right of survivorship) means that when one spouse dies, his or her half-interest in the property automatically belongs to the surviving spouse. In other words, when one spouse dies, the surviving spouse will automatically own the entire property. If you create a TOD deed naming someone other than your spouse as the beneficiary, the property will go to that person only if your spouse does not survive you.

The following chart summarizes how to approach a TOD deed if you are married:

You want your spouse to own the entire property after you die, and vice versa You want to leave your half-interest in the property to someone other than your spouse
You own property with your spouse as community property (no right of survivorship) Make a TOD deed naming your spouse as the primary beneficiary. Your spouse should make a separate TOD deed naming you as the primary beneficiary. Make a TOD deed alone. The person you name as the primary beneficiary will inherit your half-interest in the property at your death.
You own property with your spouse as community property with right of survivorship

You do not need a TOD deed. Your spouse will automatically own the entire property at your death, and vice versa.

You and your spouse can make a TOD deed together, but it would not have any effect until both you and your spouse have died. And if you die first, your spouse will have the power to revoke the deed and/or record a new one.

Or you can make a TOD deed alone, but it would take effect at your death only if your spouse had died before you.

You can change the type of ownership (see a lawyer). You can also make a TOD deed alone; it would take effect at your death only if your spouse had died before you. In this case, you would have owned the entire property upon your spouse's death, and the beneficiary you named would then inherit the entire property upon your death.

Co-owned property can get complicated. If you're still not sure how you co-own the property or whether or not your spouse has any rights to it, consult a lawyer.

Note on trust property. If you hold real estate in a trust, you probably won't need to use a TOD deed, because trust property doesn't need to go through probate anyway. If for some reason you want to use a TOD deed instead, you'll probably need to transfer the property out of the trust first. Talk to a lawyer about your estate plan.

Naming Beneficiaries

You can name anyone you please to inherit your real estate—a person, more than one person, or an organization such as a favorite charity. But if you want to name more than one person, or a minor, there are some issues you should consider.

More than one beneficiary. Before you name multiple beneficiaries on your transfer on death deed, make sure you consider 1) how the co-beneficiaries will hold title to the property after you die, 2) what will happen if one of the co-beneficiaries dies before you do, and 3) how the beneficiaries will feel about co-owning the property.

As to the first issue, when you make WillMaker's transfer on death deed for Texas, your property will transfer to your beneficiaries in equal shares with no right of survivorship. This is the default under Texas law. In other words, your beneficiaries will own your property as tenants in common and each beneficiary will be free to leave his or her share to someone else or to sell that share of the property.

Example: You name Tim, Stephanie, and Rebekah as your TOD beneficiaries. After you die, they will own the property as tenants in common. Tim leaves his one-third share of the property to his son Cameron in his will. Stephanie sells her one-third share of the property to Anya. After Tim dies, Cameron, Anya, and Rebekah own the property.

As to the second issue, if one or more of the beneficiaries dies before you do, their share or shares of the property will be transferred to the surviving beneficiaries.

Example: You name Tim, Stephanie, and Rebekah as your TOD beneficiaries. Tim dies before you do. Stephanie and Rebekah would each inherit half the property. They would own it as tenants in common, and are each free to sell or leave their half of the property to someone else.

Finally, think carefully about how your beneficiaries will feel about owning the property together. Co-ownership is cumbersome and often causes tension. For example, one co-owner could force a sale of the property even if the other co-owners didn't want to sell.

Children under 18. Think twice about naming a child under age 18 as a beneficiary. A child can take title to the property, but an adult will need to manage it.

When making a TOD deed with WillMaker, you can name an adult "custodian" under the Texas Uniform Transfers to Minors Act (UTMA) to manage the property. Under Texas's UTMA, the beneficiary becomes the outright owner of the property at age 21.

You may have other options for naming an adult property manager, including:

  • using your will to name a property guardian who will take care of any property you leave to your own young children, including property transferred by this deed, and
  • setting up a trust for a child and naming the trust as the TOD beneficiary.

For more information, see Naming a Minor Beneficiary for Transfer on Death Deeds. For help setting up a property management method, consult a qualified estate planning lawyer.

The 120-hour rule. Your transfer-on-death deed will be subject to Texas's 120-hour survival rule, which states that your beneficiary must survive you by 120 hours (or 5 days) to receive the property. The goal of this survivorship rule is to prevent your property from going to your beneficiary's beneficiaries—rather than to your own beneficiaries—if you and that beneficiary die close in time.

Example: Sarah uses a transfer-on-death deed to leave her house to her brother Juan. Her deed states that the deed is canceled if Juan does not survive her. If Sarah and Juan are in a car accident together and Sarah dies on June 10, and Juan dies on June 12, the 120-hour rule means that the deed will be canceled, and the house will go to Sarah's residuary estate. (If the 120-hour rule were not in place, Sarah's house would go to Juan's estate rather than her own.)

Sample Legal Descriptions

Several kinds of legal descriptions are used in Texas. Just copy what's on the previous deed that transferred the property to you. Here are two examples:

  • "Lot 19, Block H of Waterview 11A, an addition to the City of Rowlett, Dallas County, Texas, according to the map or plat thereof recorded in Volume 2001076, Page 2961, Map Records, Dallas County, Texas."
  • "COMMENCING at a point (from which a found ½ inch iron rod bears South 31 degrees 32 minutes 08 seconds West, a distance of 0.22 feet), on the existing west right-of-way line of North Richmond Road (U.S. Highway 59) and the north right-of-way line of Sunset Dr, being the northeast corner of Lot 30 of the Blasingame Addition to the City of Wharton, Plat of which is recorded in Volume 222, Page 637 of the Wharton County Deed Records; THENCE, North 17 degrees 26 minutes 11 seconds East, along the west line of said North Richmond Road, a distance of 200.29 feet to the northeast corner of said Blasingame Addition, being the southeast corner of a called 5.0574 acre tract of land …."

­If the legal description is too long to safely type out (they can even run several pages long), simply photocopy or scan and print it, and attach it to the transfer on death deed as "Exhibit A."

lf You Need Legal Advice

Accurate, plain-English legal information can help many people create useful legal documents. But general information is never a substitute for personalized advice from a knowledgeable lawyer. If you want professional advice about the best way to craft or use legal documents in your particular circumstances, consult an attorney licensed to practice in Texas.