Here’s what you need to know
A Transfer on Death Deed allows you to transfer real property upon your death without involving a probate court; however, it isn’t a substitute for a Will. It has limits. Here, I’ll discuss the basics about this type of deed. In my next post, I’ll address this deed’s requirements and limitations.
Purpose
A Transfer on Death Deed provides a simple and inexpensive way to transfer real property. Texans can use these deeds to reliably transfer title to their homes when they die. This deed can work in tandem with your other estate planning tools, such as your beneficiary designation accounts and your will. You may also transfer real property to designated beneficiaries’ children under certain conditions.
Characteristics
Before including this type of deed in your estate plan, you should know more about its characteristics. An effective transfer on death deed must contain the essential elements and formalities of a common Texas recordable deed.
A Transfer on Death Deed is revocable. This means you can change your mind about the deed or who you designated as a beneficiary. To revoke the deed or the designated beneficiary, you must file your revocation in the same place as you filed the original deed.
Through this type of deed, you maintain ownership and control of the property during your lifetime. You transfer what you own when you die and not what you owned when you executed and filed this deed, unlike most other deeds. In other words, if you sell the property before you die, nothing transfers to your designated beneficiary.
This deed is effective without consideration. This means nothing of value is transferred between the transferor or the transferee (designated beneficiary). Also, the deed is effective when filed in the correct county’s property records and doesn’t require the designated beneficiary to know about the deed.
Conclusion
This deed allows you to enjoy your home during your lifetime and provide you with a means to transfer it when you die. Before adding this deed to your estate plan, you should know this deed’s legal requirements and limitations. I’ll share them in my next post.
