For many Texas homeowners, a transfer on death deed is a good idea. It names who gets your house or land when you die, it keeps that property out of probate, and you keep full control while you’re alive. For a single Texas home going to adult children who get along, a transfer on death deed can do much of what a living trust does for a fraction of the cost.
It’s a poor fit in other situations. You may need someone to manage things if you become incapacitated. A beneficiary may be a minor or receive disability benefits. Or the family may simply be complicated. The deed also backfires in a handful of predictable ways that send families to court anyway. Here’s how to tell which side of that line you’re on.
How a transfer on death deed works in Texas
Under Chapter 114 of the Texas Estates Code, a transfer on death deed (often called a TODD) passes real property to the people you name when you die, without probate. Section 114.055 sets three requirements. The deed must have the formalities of a recordable deed, say the transfer happens at your death, and be recorded in the county deed records where the property sits before you die.
Texas enacted these deeds in 2015, and a few other rules shape how they work. The beneficiary doesn’t need to know about the deed, sign it or pay anything for it (Section 114.056). The property owner needs the same mental capacity required to sign a contract. And under Section 114.054(b), an agent can’t sign a TODD for you using a power of attorney. You have to sign it yourself.
While you’re alive, nothing changes. Section 114.101 says the deed doesn’t affect your right to sell or mortgage the property, your homestead rights or your property tax exemptions. It gives the beneficiary no interest at all until your death, and you can revoke it at any time.
When a TODD can stand in for a living trust
People often set up a revocable living trust mainly to keep the house out of probate. If that’s your main goal, a TODD may get you there with less paperwork. It tends to fit best when most of these are true:
- Your main asset subject to probate is one home or tract of land in Texas
- Your beneficiaries are adults who can manage property and get along
- Your bank and retirement accounts already have payable on death or beneficiary designations
- You have a will for everything else and a durable power of attorney for financial decisions
- You don’t need someone to hold the property for years or set conditions on the gift
In that situation, a TODD plus a will and current beneficiary designations can cover a lot of ground. If you’re starting from scratch, our overview of the basic Texas estate planning documents shows how those pieces fit together.
What a living trust does that a deed can’t
A transfer on death deed is a single-asset, at-death tool: it moves one piece of Texas real property when you die and does nothing before then. A living trust is a management tool that can hold many kinds of property, in any state, during your life and after it. That difference drives almost every case where a trust is the better choice.
| Question | Transfer on death deed | Revocable living trust |
|---|---|---|
| What property can it cover? | Texas real property only | Real estate in any state, accounts, personal property |
| Who manages if you become incapacitated? | No one under the deed | Your successor trustee |
| Can it hold property for a minor or a beneficiary on benefits? | No, the property passes outright | Yes, with terms you set |
| Can it set conditions or stagger a gift? | No | Yes |
| Upfront cost and effort | Lower, one recorded deed | Higher, the trust must be drafted and funded |
Say you own a lake house in another state, have young children, or want someone you trust to manage your property if you develop dementia. A deed alone won’t do any of that. A trust can.
Where transfer on death deeds backfire
Most TODD problems come from the edges of the statute, not the deed itself. The common ones are a deed that was never recorded, a later will that tries to change it, a divorce that was never noted in the deed records, a beneficiary who dies first, siblings stuck co-owning one house, an heir who is a minor or on benefits, and debts that follow the property.
The deed was signed but never recorded
A TODD that sits in a desk drawer does nothing. Section 114.055 requires recording before your death. If the owner dies before the clerk records it, the house goes through the will or the intestacy rules instead.
You tried to change it with a will
Under Section 114.057(b), a will can’t revoke or override a transfer on death deed, even a will signed later. To change beneficiaries, you record a new TODD or a revocation in the same county’s deed records.
You divorced and didn’t record the judgment
A divorce revokes the deed as to your former spouse only if notice of the final divorce judgment is recorded in the deed records before your death (Section 114.057(c)). Skip that recording, and your ex may still inherit the house.
A beneficiary died first
Under Section 114.103, a beneficiary has to outlive you by 120 hours. If they don’t, their share lapses and follows the rules Texas applies when someone named in a will dies first. Depending on the relationship, that share may go to the beneficiary’s children or fall back into your estate, sometimes through probate. Naming a backup beneficiary avoids most of that.
Several children inherit together
Unless the deed says otherwise, beneficiaries take equal, undivided shares with no right of survivorship (Section 114.103(a)(3)). That means three siblings co-own one house. Maybe one wants to live there, one wants to rent it and one wants to sell. There’s no trustee to break the tie, and the disagreement can end in a partition suit.
A beneficiary is a minor or depends on benefits
The property passes outright. A minor usually can’t sell or refinance real estate without a court-supervised arrangement. An outright inheritance can also affect a beneficiary’s eligibility for needs-based benefits. A trust can hold the property instead.
Debts, liens and title come along with the house
The beneficiary takes the property subject to any mortgage or lien (Section 114.104). If your estate can’t pay its debts, Section 114.106 lets the personal representative, and in some cases creditors, reach the property. Those claims can be brought for up to two years after your death. A TODD also transfers the property without any warranty of title (Section 114.103(d)). Because of that, a buyer’s title company may ask more questions before insuring a quick sale.
Married couples and community property
A TODD transfers only the interest you own. In a community property state like Texas, a home bought during the marriage usually belongs half to each spouse. So one spouse’s deed generally reaches only that spouse’s share. Couples who want the whole property to pass by TODD typically both sign, and many name each other first so the survivor keeps the home.
Some couples own the home as joint owners with a right of survivorship. Under Section 114.103(b), the surviving joint owner keeps the property, and the TODD takes effect only when the last owner dies. Blended families should look at this closely, because the surviving spouse may be free to change the plan later.
What happens after the owner dies
A TODD doesn’t need court approval to work, but the beneficiary still has paperwork to do. The beneficiary typically records a death certificate or an affidavit of death in the same county deed records so the title shows the transfer. The Texas State Law Library points to free forms for the deed, a cancellation and an affidavit of death. Lenders and title companies may ask for more before a sale or refinance.
Everything outside the deed still has to pass somehow. If the rest of the estate includes a car, accounts without beneficiaries or other property, the family may still need a will probated or a small estate process. Our Texas probate attorneys help families sort out what still needs court involvement. If there’s no will at all, our guide to dying without a will in Texas explains who inherits.
One quieter benefit: under Section 114.106(b), property passing by TODD isn’t treated as part of the probate estate for any purpose, including the state’s Medicaid estate recovery statute. Laws can change, so this shouldn’t be the only reason you choose one.
Is a transfer on death deed right for your family
Start with three questions. Is your house or land the main thing that would otherwise need probate? Are your beneficiaries adults who can own property together without friction? Do you already have a will and a power of attorney? If the answer to all three is yes, a TODD may be enough. If any answer is no, a trust or a more detailed plan usually earns its cost.
In our planning meetings, the families who get the most from a TODD treat it as one piece of a plan, not the whole plan. Our Texas estate planning attorneys draft transfer on death deeds alongside wills, living trusts and powers of attorney, so you can compare options side by side before you record anything.
This article is general information, not legal advice for your situation. If you’d like to talk through whether a transfer on death deed or a trust fits your home and your family, our estate planning lawyers in Austin, Buda, Bastrop, New Braunfels and Victoria can walk through it with you. Call (512) 400-2350 to schedule a consultation.
Frequently asked questions
How much does a transfer on death deed cost in Texas?
The two main costs are drafting and recording. Free fill-in forms are available, and the county clerk charges a recording fee that varies by county. Having a lawyer prepare the deed costs more but helps you avoid errors in the legal description and the beneficiary designations, which are where most problems start.
What are the disadvantages of a transfer on death deed?
A TODD covers only Texas real property, does nothing if you become incapacitated, passes property outright to minors and benefits-dependent beneficiaries, and leaves co-owning siblings with no tie-breaker. It also carries liens with it, transfers without warranty of title, and stays subject to estate creditors for up to two years.
Do I need an attorney to file a transfer on death deed in Texas?
No. Texas law doesn’t require a lawyer, and you can record a properly signed and notarized deed yourself. Many people still use one because a wrong legal description, a missed recording or a poorly chosen backup beneficiary can undo the whole point of the deed.
Do you pay inheritance tax on a transfer on death deed?
Texas doesn’t have a state inheritance tax, and a TODD doesn’t create one. Large estates may still face federal estate tax, and the property’s tax basis can matter if the beneficiary sells. Talk with a tax professional about your situation.
Can I sell my house after signing a transfer on death deed?
Yes. Under Section 114.101, the deed doesn’t limit your right to sell or mortgage the property while you’re alive. If you sell and the new deed is recorded before your death, Section 114.102 makes the TODD void as to the buyer.