What is a Texas Transfer on Death Deed?

A Texas Transfer on Death Deed is a document that names a beneficiary to inherit your real estate automatically when you pass away. It acts similarly to a “payable on death” designation on a bank account, but it applies specifically to real property, such as your home or land. Under the Texas Estates Code, the deed must be signed, notarized, and recorded in the county clerk’s office where the property is located before your death. If you do not record it, it is not valid.

The Benefits of a Transfer on Death Deed in Texas (TODD)

A TODD offers several distinct advantages:

• Avoids Texas Probate: This is the primary benefit. Because the property transfers automatically at the moment of your death, your family does not need to open a probate administration to clear the title to the home.
• You Maintain Complete Control: Signing a TODD does not give your beneficiary immediate rights to your home. The property stays your own.
• Fully Revocable: If you change your mind, marry, divorce, or decide to name a different beneficiary, you can cancel or amend the deed at any time, provided you record a revocation form before you pass away.
• Medicaid Estate Recovery Protection: In Texas, the Medicaid Estate Recovery Program (MERP) typically only files claims against assets that go through the probate estate. By bypassing probate with a TODD, you can often shield your home from Medicaid recovery.

Estate planning should always be done with the big picture in mind. The Transfer on Death Deed is but one of many estate planning tools in Texas. It should not be used in isolation of your overall plan. For example, naming a minor child directly on a TODD can complicate the estate. Minors cannot legally manage real estate in Texas, meaning the courts may still need to appoint a legal guardian to handle the property, defeating the goal of avoiding court intervention. If a property is owned jointly, a TODD could complicate ownership in unexpected ways.

In short, whether a TODD is right for you depends on your overall goals and individual circumstances.

For more information

If you are navigating the estate planning process or handling an estate administration matter, understanding your options under Texas law is an important first step.

Feel free to reach out to our office to learn whether a TODD is right for you.