A house off South Congress. One owner. One person meant to receive it. No probate case.
That is what a transfer on death deed promises, and Texas law delivers when the paperwork is right. The Texas Real Property Transfer on Death Act lives in Texas Estates Code Chapter 114. It lets you name someone to receive your real property the moment you die, with no court opening your estate. It is also easy to get wrong. This guide explains what the deed does, what Texas requires, and how these deeds quietly fail.
What a Transfer on Death Deed Does
A transfer on death deed names a beneficiary who receives your real property when you die. Estates Code Section 114.053 calls it a nontestamentary instrument, meaning it works outside your will and outside probate.
The deed reaches Texas real property only. It can cover:
- a house or condominium you own
- raw land inside or outside city limits
- a building sitting on land you hold
- mineral interests tied to that land
Vehicles, bank accounts, and furniture stay outside it. Those need other tools.
What Makes a Transfer on Death Deed Valid in Texas?
Estates Code Section 114.055 sets three requirements. Miss one and the deed does nothing.
A valid transfer on death deed must:
- contain the essential elements and formalities of a recordable deed
- state that the transfer to the beneficiary occurs at your death
- be recorded before your death in the deed records of the county clerk’s office where the property sits
That last item ruins plans. A signed and notarized deed sitting in a drawer transfers nothing. For an Austin home, the deed goes to the Travis County Clerk Recording Division, which keeps the county real property records.
Section 114.054 adds two rules. You need the mental capacity required to make a contract, and you cannot create the deed through a power of attorney. Your agent cannot sign it for you.
What Happens While You Are Still Alive?
Nothing changes. Estates Code Section 114.101 is unusually direct on this.
During your life, the deed does not affect:
- your right to sell, refinance, or mortgage the property
- your homestead rights
- your residence homestead, over-65, disability, and veteran tax exemptions
- your eligibility for public assistance
Your beneficiary holds no legal or equitable interest while you live, so that person’s creditors cannot reach the property either. Recording the deed does not trigger a due on sale clause. You do not even have to tell the beneficiary it exists, because Section 114.056 makes notice, delivery, acceptance, and payment unnecessary.
Sell the property later and the deed goes quiet. Under Section 114.102, a conveyance recorded before your death voids the deed as to that buyer.
Do You Pay Taxes on a Transfer on Death Deed?
Texas repealed its inheritance tax effective September 1, 2015, so no state inheritance tax follows the property. Recording the deed is not a taxable transfer during your life, and your property tax exemptions stay put.
At death, the property is treated much like property passing through probate, so your beneficiary usually takes it with a basis stepped up to the date-of-death value. Larger estates can still face federal estate tax. Ask a CPA about your numbers.
Can a Will Override a Transfer on Death Deed?
No, and that surprises almost everyone. Section 114.057 states that a will may not revoke or supersede a transfer on death deed.
Sign a new will next year leaving the same house to a different child, and the recorded deed still wins. In practice, the deed and the will belong on the same drafting table.
How Do You Revoke a Transfer on Death Deed?
The deed stays revocable no matter what its own text says, under Section 114.052. Revoking it takes a recorded instrument, not a phone call.
Texas recognizes these routes:
- a later transfer on death deed that cancels or contradicts the earlier one
- a separate instrument of revocation that expressly cancels the deed
- a divorce judgment, if notice of that judgment is recorded before your death
Each must be acknowledged after the deed being revoked and recorded before you die, in the county where the original was filed. If two owners signed, one revoking does not touch the other owner’s share.
Why a Backup Beneficiary Matters
Section 114.103 requires your beneficiary to survive you by 120 hours, which is five days. A share that fails that test lapses.
When that happens and no alternate is named, the property drops back into your estate, and the result depends on your will or on Texas intestate succession rules. Naming an alternate costs nothing. Name two or more people and they take equal undivided shares with no right of survivorship, so one lapsed share does not shift to the others.
Joint ownership adds a layer. If you own with a right of survivorship and a joint owner outlives you, the property belongs to that owner. Your deed works only if you are the last surviving joint owner.
What Happens to the Mortgage and Other Liens?
The property arrives loaded. Section 114.104 hands it over subject to everything attached the day you die.
That includes:
- the mortgage or deed of trust balance
- home equity and home improvement loans
- unpaid ad valorem tax liens
- recorded judgment liens and similar encumbrances
Your beneficiary inherits the payments along with the house. No one notifies the lender automatically, so that call belongs to them.
Can Creditors Reach the Property After You Die?
Yes. A transfer on death deed is not asset protection.
Section 114.106 lets the personal representative of your estate enforce estate debts, administration expenses, estate taxes, and family allowances against property that passed by this deed, when your estate cannot cover them. That proceeding must begin within two years of your death. Title companies know it, and it can slow a sale.
One protection holds. Section 114.106 also provides that property passing this way is not part of the probate estate for any purpose, including the Medicaid recovery provision in Government Code Section 546.0403. Texas recovers Medicaid costs from probate estates, so a home that avoids probate stays outside that program.
Transfer on Death Deed or Lady Bird Deed?
Texas gives owners a real choice here. A Lady Bird deed, also called an enhanced life estate deed, is not created by Chapter 114. Section 114.004 preserves it by leaving other transfer methods intact.
The practical differences:
- an agent under a power of attorney can sign a Lady Bird deed but never a transfer on death deed
- a transfer on death deed cannot trigger a due on sale clause, while a Lady Bird deed carries that risk
- property passing by transfer on death deed stays exposed to estate claims for two years
- both keep a home out of probate and out of Medicaid estate recovery
Neither wins on paper. The answer depends on your mortgage, your beneficiaries, and whether long term care is on the horizon.
What Your Beneficiary Files After You Die
Recording the deed during your life is only half the job. Title does not move on its own.
Your beneficiary records an affidavit of death in the same county deed records, and title passes once it is filed. A title company or lender will want a death certificate later, when the property gets sold or refinanced.
When a Trust Fits Better Than a Deed
A transfer on death deed handles one clean situation: a single Texas property going outright to a capable adult. Push past that and it strains.
Property in more than one state
Chapter 114 reaches Texas property only. Land elsewhere follows that state’s law, while a revocable living trust can hold both.
A beneficiary who should not take property outright
Minor children, beneficiaries with disabilities, and relatives facing creditors or divorce need a trust that holds the property, not a deed that hands it over.
Conditions or timing on the gift
The deed transfers everything the day you die. If you want staged distributions or strings attached, a trust does that work and a deed cannot.
A deed also names no guardian for your children and appoints no agent for medical decisions. Pair it with a properly drafted will and your other estate planning documents, or you have solved one problem and left the rest open.
Why Choose The Pabst Law Firm
The Pabst Law Firm is a family-run, boutique estate planning firm in Austin. Frank and Nicky Pabst handle every matter personally. You talk directly to your attorney, not intake staff, paralegals, or layers of case managers.
Planning conversations here stay plain and flat-fee friendly. You learn what a document involves and what it costs before deciding anything.
We are bilingual. Hablamos español. We serve Austin’s diverse community in English and Spanish.
Get a Free Consultation
A transfer on death deed takes an afternoon to sign and a generation to regret when it is built on the wrong facts. Bring us the property, the beneficiaries, and the mortgage, and you will get a straight answer.
Call The Pabst Law Firm at (512) 641-2676 or fill out our online form for a free consultation. We serve clients throughout Austin, Cedar Park, Round Rock, Georgetown, Pflugerville, Kyle, Buda, San Marcos, and all of Central Texas.
(512) 641-2676