Many Texans assume that passing down a home always requires going through probate. In reality, Texas law allows property owners to transfer real estate automatically at death using a Transfer on Death Deed (TODD)—also known as a beneficiary deed.

This little-known tool can save families time, money, and stress, but it must be done correctly to be legally effective.

Here’s how Transfer on Death Deeds work under Texas law—and when they make sense.

What Is a Transfer on Death Deed in Texas?

A Transfer on Death Deed allows you to name a beneficiary who will automatically receive your real estate when you die—without probate.

Texas authorizes these deeds under Texas Estates Code Chapter 114.

Tex. Estates Code § 114.051 provides that an owner may execute a deed that transfers real property to a designated beneficiary at the owner’s death.

Unlike a traditional deed, a TODD:

• Does not transfer ownership during your lifetime
• Does not affect your right to sell or refinance
• Takes effect only after death

You remain the full owner while alive.

Why Transfer on Death Deeds Are So Appealing

Transfer on Death Deeds have become popular because they offer:

✅ 1. Probate Avoidance

When properly recorded, the property passes outside probate.

This can save:

• Court costs
• Attorney’s fees
• Months of delay

✅ 2. Retained Control

Under § 114.101, the owner retains full control during life.

You may:

• Sell the property
• Mortgage it
• Revoke the deed
• Change beneficiaries

The beneficiary has no legal rights until death.

✅ 3. Low Cost Estate Planning

A TODD is far cheaper than:

• Creating a trust
• Opening a full probate estate
• Filing muniment proceedings

For many homeowners, it’s a simple planning shortcut.

Legal Requirements Under Texas Law

Texas law is strict about how TODDs must be created.

1. Written and Signed

Under § 114.052, the deed must:

• Be in writing
• Be signed by the property owner
• Meet general deed formalities

2. Proper Recording Is Mandatory

This is where many people fail.

Tex. Estates Code § 114.054 requires the deed to be recorded in the county where the property is located before death.

If it is not recorded in time, it is invalid.

No recording = No transfer.

3. Clear Beneficiary Designation

The deed must clearly identify:

• The beneficiary’s name
• Sufficient identifying information

Vague designations can invalidate the deed.

When Does the Beneficiary Get Ownership?

Ownership transfers only after death.

Under § 114.101(a):

The beneficiary’s interest vests only on the death of the owner.

After death, the beneficiary must:

1. File proof of death
2. File an affidavit
3. Record documents in county records

Only then does title update.

Are Transfer on Death Deeds Subject to Creditors?

Yes—this is a major misconception.

Under § 114.102, property transferred by TODD remains subject to:

• Valid creditor claims
• Estate administration
• Medicaid estate recovery

If the estate owes money, the property may still be reached.

A TODD does not shield assets from debts.

Special Issues with Married Property

Texas is a community property state, which complicates TODDs.

Community Property Risks

If property is community property:

• One spouse cannot usually defeat the other’s interest
• A TODD may be partially ineffective

If both spouses do not sign, problems may arise.

This often leads to litigation after death.

How Transfer on Death Deeds Can Go Wrong

In practice, many TODDs fail due to technical mistakes.

Common problems include:

❌ Late Recording

Recorded after death → Invalid

❌ Conflicting Wills

TODDs override wills, but confusion leads to disputes

❌ Multiple Beneficiaries

Poor drafting causes fractional ownership battles

❌ Divorce or Remarriage

Outdated beneficiaries remain unless revoked

❌ Title Insurance Issues

Improper TODDs can cloud title for years

Can a Transfer on Death Deed Be Revoked?

Yes.

Under § 114.057, an owner may revoke a TODD by:

• Recording a revocation
• Recording a new TODD
• Transferring the property by deed

No beneficiary consent is required.

TODD vs. Living Trust: Which Is Better?

Feature

TODD

Living Trust

Cost

Low

Higher

Probate Avoidance

Yes (limited)

Yes (comprehensive)

Creditor Protection

No

Limited

Flexibility

Moderate

High

Complexity

Simple

More complex

TODDs work best for:

• Single properties
• Simple family structures
• Low-debt estates

They are less effective for complex estates.

When a Transfer on Death Deed Makes Sense

A TODD may be appropriate if you:

✔ Own one main residence
✔ Have clear beneficiaries
✔ Have low estate debt
✔ Want minimal paperwork
✔ Do not need a trust

It may be inappropriate if you:

✘ Own multiple properties
✘ Have blended families
✘ Expect creditor claims
✘ Have Medicaid concerns
✘ Need asset protection

Why Legal Review Matters

Because TODDs affect title, inheritance rights, and creditor exposure, small drafting errors can destroy their value.

Texas courts strictly enforce statutory requirements. A defective TODD often leads to:

• Heirship proceedings
• Quiet title lawsuits
• Partition disputes
• Clouded titles

All of which cost far more than proper planning.

Final Thoughts

Transfer on Death Deeds are one of Texas’s most useful—and misunderstood—estate planning tools.

When done correctly, they can:

• Bypass probate
• Simplify inheritance
• Reduce legal expenses

When done incorrectly, they create years of litigation.

If you are considering using a Transfer on Death Deed, professional guidance is often the difference between simplicity and chaos.

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.