In Texas, our probate laws are fairly simple and straightforward. While the chief goal of estate planning in some states (especially in the northeastern part of the country) is specifically to avoid probate, in Texas, if you have the right kind of pre-planning done probate can be simple and relatively low-cost. Nonetheless, there are still many occasions which families want to avoid the process altogether.
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. Thankfully, the Texas Legislature recently adopted a new tool that allows a type of pre-planning that allows an owner of property to effect the transfer on his/hear death without a probation action. Enter the Transfer on Death (“TOD”) Deed.
In essence, a TOD 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 – Stanley owns his own home and when he dies wants to give it to his son, Marcus. Stanley can execute a TOD deed that says when he dies, the house automatically switches owners to Marcus without the necessity of a probate action in court. For some, this doesn’t sound like a big deal but for law geeks around Texas, this was a major leap toward increased efficiency and reducing legal expenses.
There are some limitations on TOD deeds. 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 TOD deed is used to convey the property, a Last Will and Testament 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 TOD deed, you can’t simply re-do your will but rather must either execute a new TOD deed or simply record a revocation.
TOD deeds 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 sell the property (or borrow against it), and generally enjoy the same benefits of ownership that they enjoyed without the deed. The bottom line: TOD deeds allow an owner of property to transfer that property to a beneficiary (or, if more than one person is desired, to multiple beneficiaries in equal portions) without the expense of a probate action.
Our firm assists families from around Texas with estate planning (including the creation of TOD deeds), probate, guardianship, and business law. If we can assist your family, please call us today. We can be reached by telephone at (469) 607-4503 or firstname.lastname@example.org.
ATTORNEY CHRIS PARVIN is Board Certified in Estate Planning & Probate Law by the Texas Board of Legal Specialization. Mr. Parvin is the Managing Partner of the Dallas, Texas law firm of Parvin Law Group, P.C. and serves as an Adjunct Professor of Law at Texas A&M University School of Law. Mr. Parvin can be reached by email at email@example.com.
Parvin Law Group, P.C. is a Concierge Law Firm in Dallas, Texas with attorneys practicing law in the fields of Estate Planning, Probate, Business Law and Family Law.