Contact: Catherine Galloway
catherine.galloway@texasatj.org | 512-427-1892
Texas Legislature Creates New Way to Transfer Real Property Upon Death
Thanks to the 84th Legislature, Texans have a new, easy way to transfer real property to someone else upon their death. It does not involve going through probate court, which can be a lengthy and costly process. It also allows the owner to keep the exact same rights to the property that they’ve always had while they are alive – they can get the property tax exemption, use it as collateral on a loan, or sell the property as they like.
It works similarly to a life insurance policy or a payable on death bank account because the asset passes directly to the beneficiary named in the transfer on death deed outside the probate system when the owner dies.
While the transfer on death deed is a welcome benefit for all Texans, it brings substantial relief to our low-income homeowners. “The family home may be the only real asset they have, but the most common way to transfer title in Texas is often financially beyond their reach,” said Harry Reasoner, Chair of the Texas Access to Justice Commission. “Many cannot afford to have a will prepared to properly transfer title to the property after they die, and even if a will exists, their heirs may not be able to afford to probate the will.”
Failure to transfer clear title to property is a significant problem for low-income homeowners. The homes are often informally passed down to a family member, but that person is at risk of losing the home when clear title cannot be shown.
When a natural disaster strikes and a property has been informally handed down through generations, the people living there cannot qualify for FEMA benefits because they cannot show that they are the legal owners. The same is true for property tax exemptions.
These homes are often abandoned, causing blight and an invitation to crime to our neighborhoods.
Texas Supreme Court Chief Justice Nathan Hecht commented, “While it is always best to have a lawyer, millions of Texans cannot afford one. The transfer on death deed is a useful tool for low-income Texans to transfer clear title to property. It will help keep families in homes, which benefits the communities in which we live by keeping people off the street and reducing blight.”
Now, people can convey clear title to their property by completing a transfer on death deed form, signing it in front of a notary, and filing it in the deed records office in the county where the property is located before they die at a cost of less than fifty dollars.
The Texas Access to Justice Commission has created a do-it-yourself Transfer on Death Deed Kit that includes forms and instructions for completing a transfer-on-death deed as well as a revocation form in the event that someone wants to cancel or change the transfer on death deed, and an affidavit of death that must be filed when the property owner dies. The kit is available on TexasLawHelp.org.
