Transfer on Death Deed in Texas: How It Works and What to Know

A transfer on death deed is one of the simplest ways to leave a house to someone in Texas without sending it through probate. It costs little to prepare, the owner keeps full control while alive, and the house passes to the person named in the deed when the owner dies. It also has limits that catch families off guard, especially around mortgages, creditors and what happens when the person named dies first.

This guide explains how a transfer on death deed works under Texas law, what makes one valid, how to change or cancel it, and what the beneficiary has to do after the owner passes away.

What Is a Transfer on Death Deed?

A transfer on death deed (often shortened to TODD) is a deed that names one or more people who will receive real property when the owner dies. Texas adopted it in 2015 through the Real Property Transfer on Death Act, now Chapter 114 of the Texas Estates Code. It applies to deeds signed on or after September 1, 2015.

Until the owner dies, nothing changes. The owner still owns the home, can live in it, sell it, refinance it, or change their mind about who gets it. The beneficiary has no ownership rights during the owner's lifetime.

Requirements for a Valid Transfer on Death Deed in Texas

Under Texas Estates Code Section 114.055, a transfer on death deed must:

• Contain the essential elements and formalities of a recordable deed, including a legal description of the property.
• State that the transfer to the beneficiary happens at the owner's death.
• Be recorded in the deed records of the county clerk's office before the owner dies.

That last point is the one that most often goes wrong. A deed that is signed and notarized but sitting in a drawer when the owner dies does nothing. It has to be recorded in the county where the property is located while the owner is still alive.

The deed does not need to be given to the beneficiary, and the beneficiary does not need to know about it or accept it (Section 114.056). According to TexasLawHelp.org, the owner must sign it personally in front of a notary. An agent acting under a power of attorney cannot sign one for the owner.

How to Change or Cancel a Transfer on Death Deed

A transfer on death deed can always be revoked, even if the deed itself says otherwise (Section 114.052). The common ways to change it are:

• Recording a new transfer on death deed that names a different beneficiary.
• Recording a cancellation of the transfer on death deed.
• Selling or deeding the property to someone else during the owner's lifetime.

One rule surprises people: a will cannot override a transfer on death deed (Section 114.057). If a parent signs a transfer on death deed naming one child and later writes a will leaving the house to all of their children, the recorded deed still controls. TexasLawHelp.org also notes that a divorce cancels the deed's gift to the former spouse.

What Happens When the Owner Dies

When the owner dies, the property passes to the beneficiary as long as the beneficiary outlives the owner by at least 120 hours, which is five days (Section 114.103). If more than one beneficiary is named, they receive the property in equal shares with no right of survivorship, unless the deed says otherwise.

The beneficiary then needs to make the transfer part of the public record. TexasLawHelp.org explains that this is done by recording an affidavit of death in the county records, and that a title company will want a death certificate or similar proof before the home can be sold or used as collateral.

What if the Beneficiary Dies First?

If a beneficiary does not outlive the owner by 120 hours, that beneficiary's share lapses. Since a 2017 amendment, the owner can choose in the deed whether a lapsed share goes to the beneficiary's children or to the other named beneficiaries. If the deed does not address it, the share passes under the rules that apply to a gift in a will, which can mean the house ends up in probate anyway. Naming a backup beneficiary avoids most of this.

The Mortgage, Liens and Creditors Still Come With the House

A transfer on death deed moves ownership. It does not wipe out debt. Under Section 114.104, the beneficiary takes the property subject to every mortgage, lien and other interest on it when the owner dies. If the house still has a mortgage, the payments do not stop. If there are unpaid property taxes, those stay attached to the property too.

The deed also does not protect the house from the owner's creditors. If the rest of the estate cannot cover the owner's debts, Section 114.106 allows the estate's representative to go after the property that passed by transfer on death deed. The property also passes without any warranty of title, even if the deed says otherwise.

On Medicaid, TexasLawHelp.org states that under current law a home that passes by transfer on death deed is not subject to Medicaid estate recovery as long as it does not go through probate. Rules like this can change, so confirm with an elder law attorney if it matters to your family.

Transfer on Death Deed vs. Lady Bird Deed vs. Will

• Will: Leaves the house to whoever you choose, but the will usually has to be probated before the heirs can sell or refinance.
• Transfer on death deed: Avoids probate for the house, is created by statute, and can be prepared with free forms. It only works if it is recorded before death.
• Lady bird deed (enhanced life estate deed): Also avoids probate and lets the owner keep control, but it is not written into the Estates Code. Some families and attorneys prefer it for Medicaid planning. Ask a Texas attorney which fits your situation.

When there is no will and no transfer on death deed, the family is usually left with probate or an affidavit of heirship to prove who inherited the house.

After You Inherit: Taxes, Upkeep and Your Options

Once the house is yours, the costs start right away. If you move in and make it your principal residence, you may qualify for the Texas homestead exemption, which can lower the property tax bill a great deal. If no one lives there, the family carries the taxes, insurance, utilities and any mortgage on an empty house.

That is usually when beneficiaries sit down and start deciding what to do with an inherited house: move in, rent it out, buy out the other beneficiaries, or sell. Because the transfer on death deed already put the title in the beneficiary's name, a sale can often move faster than it would after probate.

Common Questions About Texas Transfer on Death Deeds

Do I need a lawyer to make a transfer on death deed?

No. Free forms are available through TexasLawHelp.org and the Texas State Law Library. Many people still have an attorney review the deed, because a missing legal description or an unrecorded deed can defeat the whole point.

Can I sell my house after recording a transfer on death deed?

Yes. You keep full ownership while you are alive. If you sell the house, the beneficiary simply receives nothing for that property.

Can I use a transfer on death deed if I still have a mortgage?

Yes. The beneficiary will take the house subject to the mortgage and will need to keep up the payments, refinance, or sell.

Does the beneficiary have to do anything while I am alive?

No. The beneficiary does not have to sign anything or even know about the deed.

Does a transfer on death deed avoid property taxes?

No. Property taxes stay with the property. The beneficiary becomes responsible for them after the owner's death.

The Bottom Line

A transfer on death deed is an inexpensive way to pass a Texas home to the people you choose without probate, as long as it is recorded before death. It does not erase the mortgage, liens or creditor claims, and a will cannot change it, so it is worth reviewing whenever your family situation changes.

This article is general information, not legal advice. Laws and their interpretation can change, so speak with a Texas attorney about your specific situation.