Many Houston couples reside in a house or condominium that is owned by only one of them. In most cases, the person who owns the real estate wants to ensure that title to the property passes to the other member of the couple, if the owner should be the first to die.
In earlier decades, the preferred method of accomplishing this end was for the owner to transfer the real estate to a third person (often called a, “straw man”) who then re-conveys the property to the couple jointly with a right of survivorship. A right of survivorship entitles the surviving member of the couple to automatically take title to the house upon the filing of a death certificate for the deceased member.
Texas also created the Lady Bird deed to facilitate the transfer of property to another person without involving the probate court, and in 2015, the legislature created the “transfer on death deed” (TODD) to further simplify the transfer. A TODD has the effect of transferring the property to the specified beneficiary upon the death of the grantor.
In order for the transfer to become effective, the beneficiary must survive the grantor by at least 120 hours, if the beneficiary does not survive the grantor by 120 hours, their deaths will be deemed have been simultaneous and the property will pass to the heirs of the grantor. TODDs must satisfy three conditions: meet all state and local standards for recordable deeds, expressly state that the transfer will occur on the grantor’s death and be recorded during the owner’s natural lifetime in the county where the property is located.
An owner may revoke a TODD any time during the owner’s lifetime by executing and recording a TODD that specifies a different beneficiary. The owner can convey the property to a third person with a deed that specifically cancels the TODD. A third option is the execution and filing of a form that cancels the TODD.
TODDs are often used as part of a comprehensive estate plan. But, TODDs and other methods of transfer can be complicated and confusing.