Relatively recently, the Texas Legislature gave the residents this state an additional option for transferring their home or other real estate without having to write up a will and force their beneficiaries to have to go through the probate process. This was a particularly helpful measure for those Houston, Texas residents who may own their own home but who may not have much more in the way of assets.
The way a Transfer on Death Deed works is fairly simple. If a Texas resident properly fills out and records a Transfer on Death Deed, then the person named as the beneficiary on the deed automatically receives the property. Effectively, the Transfer on Death Deed makes a piece of property work like a life insurance policy a share of stock, both of which can get passed to a loved one without a will.
This type of deed is useful because it is cost effective when compared to a will and formal probate proceeding, yet it does not require a person to put someone’s name on their property immediately. As its name implies, the deed only takes effect when the original owner of the land dies. Prior to that, the owner has every right to do with the property as he or she pleases.
The big caveat is that a Transfer on Death Deed will be effective even in the face of a valid will, and that is the case even if the will names a separate person as the intended recipient of the property. If a person wants to change a Transfer on Death Deed, they will need to submit a replacement Deed which explicitly cancels the prior one.
Although Transfer on Death Deeds are likely going to help a lot of people, it is also important to remember that even with their arrival, many people are best served having a will or a trust.