trANSFER ON DEATH DEED
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Texas Transfer on death deed
Texas allows an individual property owner (transferor) to transfer their interest in real property using a Texas Transfer on Death Deed. This deed is often referred to as a TODD.
The full name of a TODD is Revocable Transfer on Death Deed. This deed should be prepared, signed, and notarized before a property owner dies.
A Transfer on Death Deed is a future transfer of the property. It is not a present transfer of the property. Ownership of the property does not change until the owner who signed the Transfer on Death Deed dies. No formal action is required to transfer the property upon the death of the owner. The transfer is automatic.
Good to know: The property is transferred on the death of the owner only if the owner still owns the property at the time of his or her death.
Note: If a property owner dies without a TODD, there may be other options to transfer the deed of a house after death. You may need two documents if this is the case. In most cases, an Affidavit of Heirship and a General Warranty Deed.
Transfer on death deed
The terminology of a Transfer on Death Deed is different from other deeds.
Keep in mind, this deed is not a testamentary instrument and it is not a Will. The TODD does not replace a Will. You may still need a Will for other property, banks accounts, stock certificates or financial funds.
When a TODD is properly prepared, signed, notarized, and recorded in the deed records, no Probate is needed to transfer title to the property described in the deed.
Most importantly, not having to go to Probate could potentially save your family thousands of dollars. Meanwhile, our fee to prepare a Transfer on Death Deed is $195.
Good to know: Since the Transfer upon Death Deed conveys property outside of Probate, it avoids incurring costs to transfer the property to your beneficiaries upon your death.
Under current law, it may also exclude the real property from Medicaid estate recovery. We make no guarantees, however. The law changes often. Contact your local Medicaid office if you have questions regarding Medicaid.
Note: When the property owner who signed the Transfer on Death Deed passes away, an Affidavit of Death should be filed in the property records. This document verifies the death of the owner and the beneficiary or beneficiaries named on the Transfer on Death Deed become the new owners of the property
Good to know: It is recommended that you name alternative beneficiaries when planning property deed transfers upon death. Should the original beneficiaries die before you do, the property will transfer to the alternative beneficiaries.
It is worth noting that in some states the TODD may be referred to as a Beneficiary Deed. However, this is not the term legally used in Texas.
A TODD names beneficiaries who will own the real property at the time of the transferor’s death. You can name one or more beneficiaries. The beneficiaries can share equally or in whatever percentage share you desire to designate.
A beneficiary may be anyone or any entity, including:
Advantages of a transfer upon Death Deed
One advantage of a Transfer upon Death Deed is that, unlike other deeds, it can be revoked for any reason at any time prior to your death.
In other words: If you change your mind, you simply revoke it.
Furthermore, you keep the rights to sell the property, mortgage or lease it at any time before you pass. You do not need the permission of your beneficiaries. In fact, your beneficiaries do not need to know you signed and filed the Transfer on Death Deed (TODD).
Note: The time to plan for the transfer of property upon the death of a loved one is before they pass.
Good to know: With a Transfer on Death Deed you continue to be entitled to claim any tax exemptions you may be receiving.
There are many tax exemptions available in Texas, including:
General Residence Homestead • Age 65 or Older Exemption • Age 55 or Older Surviving Spouse of individual who qualified for Age 65 or Older Exemption • Disabled Person Exemption • 100% Disabled Veteran or Surviving Spouse of Disabled Veteran who received the 100% Disabled Veteran’s Exemption • Donated Residence Homestead of Partially Disabled Veteran or Surviving Spouse of Disabled Veteran who qualified for Donated Residence Homestead • Surviving Spouse of Member of Armed Forces Killed in Action • Surviving Spouse of First Responder Killed in Line of Duty • Partially Disabled Veteran or Survivor (not limited to your homestead).
Tax exemptions can save you money.
To claim your exemptions, contact your local Central Appraisal District.
transfer on death deed prepared for $195
R. Scott Steinbach is licensed in the state of Texas. Board Certified by the Texas Board of Legal Specialization in Residential Real Estate Law. AV Preeminent rated by Martindale-Hubble. Peer rated for Highest Level of Professional Excellence.
Texas Property Deeds is a service of The Steinbach Law Firm.
The Steinbach Law Firm is a Texas Real Estate Law Firm. We prepare all documents for any real estate transaction in Texas.