Transfer on Death Deeds in Texas: A Powerful Tool to Avoid Probate

When families face the loss of a loved one, the last thing they want is a long, expensive probate process just to transfer ownership of a home. Texas offers an alternative that can simplify everything: the Transfer on Death Deed, often called a TODD.

This tool, governed by Texas Estates Code Chapter 114, allows real property to pass directly to chosen beneficiaries—without probate—as long as the rules are followed.

Below is a clear breakdown of how TODDs work, why they matter, and where people often get tripped up.

What Is a Transfer on Death Deed?

A Transfer on Death Deed (TODD) is a legal document that lets a property owner name who will inherit their real estate when they die. Unlike a traditional deed, a TODD doesn’t transfer ownership immediately—it only becomes effective after the owner passes away.

This allows the owner to:

• Keep full control of the property during their lifetime

• Sell, refinance, or change their mind at any time

• Avoid probate for that specific property

Key Statutes You Need to Know

TODDs are powerful, but they’re governed by specific rules. Here are the most important ones from Chapter 114.

§ 114.051 — Authority to Use a TODD

This section authorizes individuals to transfer their ownership interest in real property to one or more beneficiaries. The key phrase: the transfer becomes effective upon the transferor’s death.

In other words, the owner doesn’t lose control while alive.

§ 114.055 — Requirements for a Valid TODD

This section outlines two critical rules:

1. The deed must clearly state that the transfer happens at death, not before.

2. The deed must be recorded before the owner dies in the county clerk’s real property records.

If it isn’t recorded before death?It’s invalid—no exceptions.

§ 114.103 — What Happens at Death?

At the moment of death:

• The beneficiary receives the property if they survive the owner by 120 hours (five days).

• If they do not survive that long, the transfer fails, and the property passes under the will or through intestacy.

This avoids confusion in cases where both the owner and beneficiary pass around the same time.

§ 114.104 — The Property Transfers With Its Liens

The statute makes this crystal clear:

The beneficiary takes the real property subject to all encumbrances that exist at the time of the owner's death.

This includes:

• Mortgages

• Home equity loans

• Tax liens

• Judgments attached to the property

• Mechanics liens

A TODD does not eliminate debt. It simply passes the property—and all its obligations—to the next person.

Why TODDs Matter for Real Estate, Foreclosure, and Family Planning

1. They avoid probate.

Probate in Texas can cost thousands and take months. A TODD keeps the property out of that process.

2. They allow the owner to stay in full control.

Unlike adding a child to the deed (which can trigger gift taxes and liability), a TODD lets the owner retain:

• 100% ownership

• 100% decision-making power

3. They’re helpful in foreclosure situations.

If a homeowner is older or in poor health and facing foreclosure:

• A TODD ensures the property passes to a beneficiary even if probate would have been too slow.

• If a foreclosure sale creates surplus funds, the beneficiary has standing to claim those proceeds.

4. They simplify inheritance.

Heirs don’t have to fight over title or pay an attorney just to transfer ownership.

Common Mistakes People Make

Mistake #1 — Not recording the TODD before death

This is the most fatal error. Without recording, the deed is invalid, even if perfectly drafted.

Mistake #2 — Assuming TODDs clear debts

They don’t. The beneficiary takes the property exactly as it is—liens included.

Mistake #3 — Forgetting to plan for backup beneficiaries

If the beneficiary dies within 120 hours, the TODD fails.

Mistake #4 — Believing a TODD avoids Medicaid estate recovery

In some cases, MERP can still reach the property. Proper planning is essential.

Real‑World Scenario

A homeowner in Dallas records a TODD leaving her home to her son. She passes away while behind on mortgage payments.

Here’s what happens:

• The son becomes the legal owner instantly.

• He has the right to redeem, sell, or negotiate with the lender.

• The foreclosure process continues because mortgage liens survive the transfer.

• If the property sells at foreclosure and generates excess proceeds, the son—not distant relatives—has the first legal claim.

Final Takeaway

The Transfer on Death Deed is one of the most strategic tools Texas offers for families, investors, and homeowners. It:

• Avoids probate

• Preserves control

• Simplifies inheritance

• Protects equity

But like any tool, it must be executed correctly.

Our next will explore how Muniment of Title works—and when it’s the fastest way to transfer real estate without full probate. Stay tuned!!!