Transfer on Death Deeds (TODDs) have become an increasingly popular estate planning tool in Texas because they allow real estate to pass directly to a beneficiary without probate. They are relatively inexpensive, simple to prepare, and allow the property owner to retain complete ownership during life.

However, many property owners later discover that circumstances change. Relationships end, beneficiaries pass away, children are born, or estate plans evolve. Fortunately, Texas law makes clear that a Transfer on Death Deed is generally revocable during the owner's lifetime.

Understanding how—and how not—to revoke a Transfer on Death Deed can prevent expensive title problems after death.

What Is a Transfer on Death Deed?

A Transfer on Death Deed allows an owner of Texas real property to designate who will receive the property automatically upon the owner's death, while allowing the owner to retain full ownership rights during life.

Unlike a traditional deed, the beneficiary receives no present ownership interest while the grantor is alive. The owner may continue to:

• Sell the property;
• Mortgage the property;
• Lease the property;
• Improve the property; or
• Change beneficiaries.

Texas Law Expressly Allows Revocation

Texas Estates Code § 114.057 provides:

"A transfer on death deed is revocable regardless of whether the deed or another instrument contains a contrary provision."

This is an important protection. Even if the deed itself claimed to be "irrevocable," Texas law overrides that language.

How Can a TODD Be Revoked?

The Texas Estates Code provides several methods.

Generally speaking, revocation may occur by:

• recording a properly executed revocation instrument before death;
• recording a new Transfer on Death Deed that is inconsistent with the earlier deed; or
• transferring the property during the owner's lifetime.

The key point is that the revocation generally must occur before the owner's death and must comply with statutory requirements.

Simply Changing Your Will Usually Does Not Work

One of the most common misunderstandings involves wills.

Many people assume they can execute a new will leaving the property to someone else. Unfortunately, a Transfer on Death Deed generally controls independently of the will.

Because the property transfers by operation of law upon death, merely changing a will often does not revoke an existing TODD.

If your estate plan changes, your real estate documents should also be reviewed.

Selling the Property

Because the owner keeps complete ownership during life, the owner may generally sell the property.

Once the property is conveyed to a third party, the beneficiary named in the Transfer on Death Deed generally has nothing left to receive because the owner no longer owned the property at death.

Can You Mortgage the Property?

Yes.

A Transfer on Death Deed does not prevent the owner from refinancing or granting liens against the property.

If the beneficiary ultimately receives the property, it generally passes subject to any valid liens that exist at the owner's death.

Multiple Transfer on Death Deeds

Sometimes an owner signs more than one TODD over the years.

Rather than creating certainty, multiple recorded deeds can create confusion if they contain inconsistent beneficiary designations or are executed improperly.

Proper legal review can often prevent future title disputes among heirs and beneficiaries.

What Happens If the Beneficiary Dies First?

If the named beneficiary dies before the owner, the result depends upon the specific circumstances and applicable provisions of the Texas Estates Code.

This is another reason estate plans should be reviewed periodically rather than assumed to remain effective indefinitely.

Recording Matters

A revocation generally is not effective merely because it is signed.

Like the original Transfer on Death Deed, proper execution and recording are essential to protect the public record and avoid later disputes concerning ownership.

Practical Considerations

Transfer on Death Deeds can be excellent planning tools, but they should not be treated as "set it and forget it" documents.

Life changes frequently. Marriage, divorce, births, deaths, property sales, refinancing, and tax planning considerations may all justify reviewing whether an existing TODD still reflects your wishes.

Periodic estate plan reviews can often prevent costly probate litigation and title disputes later.

Final Thoughts

Transfer on Death Deeds provide Texans with a flexible way to transfer real estate outside probate while retaining complete ownership during life. Just as importantly, Texas law generally allows owners to change their minds.

If your circumstances have changed since signing a Transfer on Death Deed, reviewing the document before problems arise can help ensure your property ultimately passes exactly as you intend.

Disclaimer: This article is provided for general educational purposes only and does not constitute legal advice. Every estate planning and real estate matter is unique. If you have questions regarding a Transfer on Death Deed or any Texas property issue, consult a qualified Texas attorney.

At David C. Barsalou, Attorney at Law, PLLC, we help clients navigate business, family, tax, estate planning, and real estate matters ranging from document drafting to litigation with clarity and confidence. If you’d like guidance on your situation, schedule a consultation today. Call us at (713) 397-4678, email barsalou.law@gmail.com, or reach us through our Contact Page. We’re here to help you take the next step.