DEED Upon Death in Texas
BIOGRAPHY & DISCLAIMER
ULTRA LEGAL
Courtesy of Byron K. Barclay
BYRON K. BARCLAY BKBarclay@lawyer.com www.BarclayLawFirm.com 713.224.2334
The Texas Legislature passed a new law, effective September 2015, allowing owners of real estate to deed their real estate to their heirs outside the probate process (i.e. without a Will), by creating a Transfer on Death Deed. The effect of this new law is similar to a bank account or life insurance policy that transfers the proceeds of an account after the death of the owner. The owner may even designate a primary beneficiary or multiple primary beneficiaries, as well as naming an alternate beneficiary if they so desire to ensure that the property can be transferred according to their wishes. To be effective, the Transfer on Death Deed must comply with all of the existing requirements for a deed in Texas (i.e. in writing, with legal description of property and duly signed, with notary acknowledgment by the Grantor/property owner), but must also include the name and address of the designee (the one who will receive the property after the Grantor’s death) and the deed must be recorded in the deed records of the county clerk where the property is located. Finally the deed must explicitly and clearly state that the deed is not effective until after the death of the Grantor/owner. There are some important things to consider before choosing this type of deed as an estate planning tool. The statute specifically states that notice, delivery or acceptance of the deed by the beneficiary is required. One may effectively file/record the deed in the real property records without advising or delivering the recorded
Transfer on Death Deed to the beneficiary. Further, if multiple beneficiaries are listed, each beneficiary will share the property in equal shares, meaning it is not possible with this type of deed to transfer fifty percent to a spouse and splitting the remaining percent between multiple children. Further, because most property in Texas owned by spouses is considered community property, each spouse owns his/her share as “tenants in common.” To effectively transfer a community share of the property to your spouse without a Will, you must in fact list your spouse as the primary or sole beneficiary on the Transfer on Death Deed. After the death of the property owner, the beneficiary files a certified copy of the death certificate in the county property records where the Transfer on Death Deed was recorded, proving the title to the property was effectively transferred to the beneficiary. Should there be a mortgage or a lien however, the new owner would only have title to the property subject to those pre-existing mortgages or liens. Further, should the assets of the deceased property owner’s Estate be insufficient to pay the debts of the Estate, the Executor or Administrator for the Estate may be able to use the real property to pay those debts, through the administration process. Finally, a Transfer on Death Deed is no substitute for a Will, or the advice of an experienced attorney. One should always seek out and carefully consider this advice before proceeding with such a plan. ADVERTORIAL UltraMagTexas.com
Byron K. Barclay is a Houston, Texas attorney and Board Certified by the Texas Board of Legal Specialization in Personal Injury Trial Law. In addition, Mr. Barclay handles estate planning matters and is regularly appointed to serve various courts in Harris County as an Attorney Ad Litem for the estates of persons who have died without a will. Mr. Barclay also handles commercial litigation, divorces, family law and child custody issues. The foregoing article is offered only as a public service to this community and does not constitute solicitation or provision of legal advice. This site and column should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author. Nothing in this column or on any website where it may be published is intended to create an attorneyclient relationship and nothing posted by Mr. Barclay constitutes legal advice. Should you have questions, you may forward them via email to Mr. Barclay at BKBarclay@lawyer.com. Questions may be edited for length or clarity. Mr. Barclay will choose questions submitted for brief answers and possible publication. Mr. Barclay reserves the right to choose which questions to answer, and submission of a question does not guarantee that he will provide an answer.
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