In Texas, our probate laws are relatively simple and direct. While the primary goal of estate planning in some states is specifically to avoid probate, in Texas, if you have the right kind of pre-planning done probate can be simple and relatively cost efficient. Still, there are numerous occasions and situations when families want to avoid the process altogether. Some choose to avoid probate for privacy reasons or simply avoid wish to avoid probate because of the time and effort needed to properly administer the probate process.

For example, in a situation where the family’s only real asset is the family home, would you really want to go through the time and expense of probate if another (faster and cheaper) alternative was available? Well, if this is a situation like yours, there is an option recently adopted by the Texas State Legislature that is a tool for the purpose of allowing a type of pre-planning that permits an owner of real property (i.e., the family home) to effect the transfer on his/her death without requiring a probate action. 

This option is called a Transfer on Death Deed (“TODD”). A Transfer on Death Deed is a type of real estate deed that allows someone to bypass probate because the deed automatically transfers the real property upon death instead of becoming a part of the decedent’s estate. Think of it in this way – Jane owns her own home and when she dies wants to give it to her son, James. Jane can execute a TODD that says when she dies, the house automatically shifts ownership to James without the necessity of a probate action in court. 

There are some limitations on TODDs. First, obviously, it must be done during the property owner’s lifetime and while the owner is still able to personally sign the deed. Currently, an agent under a Power of Attorney may not sign such a deed for the principal. Second, if a TODD is used to convey the property, a Will is not sufficient to un-do the deed. In other words, if you change your mind about who you’ve made the beneficiary of the TODD, you can’t simply re-do your will but rather must either execute a new TODD or simply record a revocation.

TODDs are an excellent jump forward for simple estate planning without significant expense. They allow the owner of the property to record the deed that will take effect upon their death, continue to own the property throughout the course of their life, they can still convey the property, and generally enjoy the same benefits of ownership that they enjoyed without the deed.

The key point: a Transfer on Death Deeds allows an owner of property to transfer that property to a beneficiary without the expense of a formal probate action.

If you would like to learn more about creating a customized estate plan that fits your needs, contact Weldy Law, PLLC to schedule a free initial consultation.

The above blog is for informational purposes only and is not legal advice nor does any information or communication with this website create an attorney-client relationship.