A transfer on death designation in Texas lets you name someone to receive a specific asset automatically at your death, without probate. Texas recognizes these designations for three kinds of property: real estate, motor vehicles, and financial accounts. Each has its own form, its own filing office, and its own rules, but the core idea is the same. You keep full control of the property while you’re alive, and the beneficiary gets nothing until you die.
What You Can Transfer This Way
Three categories of assets qualify, each governed by a different statute.
Real property is covered by Chapter 114 of the Texas Estates Code, which authorizes a transfer on death deed (TODD) for any interest in Texas real estate.1Justia. Texas Estates Code Chapter 114 – Transfer on Death Deed The definition is broad enough to include homes, raw land, and mineral interests like oil and gas rights. You can transfer full ownership or a partial interest, and you can name more than one beneficiary.
Motor vehicles are handled under Section 501.0315 of the Transportation Code. You can designate a beneficiary for a car, truck, or motorcycle, but only one person per vehicle.2State of Texas. Texas Transportation Code TRANSP 501.0315 No co-beneficiaries.
Financial accounts fall under Chapter 113 of the Estates Code. Banks, credit unions, savings institutions, and brokerage firms can register accounts in payable-on-death (POD) or transfer-on-death form.3Texas Statutes. Texas Estates Code Section 113.001 – General Definitions Checking, savings, CDs, and brokerage portfolios all qualify.
Setting Up a Transfer on Death Deed for Real Estate
A TOD deed is only valid if it does three things: contains the essential elements of a recordable deed, states that the transfer happens at the owner’s death, and gets recorded in the county where the property sits before the owner dies.4State of Texas. Texas Estates Code Section 114.055 – Requirements A deed sitting in a drawer, signed but never filed, has no legal effect.
The capacity requirement is stricter than the one for a will. Texas requires contract-level mental capacity to sign or revoke a TOD deed, meaning the person must understand the consequences and the alternatives, not just recognize what they own.5State of Texas. Texas Estates Code Section 114.054 – Capacity of Transferor An agent under a power of attorney cannot sign one for you. You have to sign it yourself.
To prepare the deed, pull the legal description from your most recent recorded deed. County clerks keep these records, and many Texas counties offer searchable databases online. A street address is not enough; you need the lot-and-block or metes-and-bounds description. Include your name as transferor, the beneficiary’s full legal name, and an explicit statement that the transfer takes effect at your death.
Name a backup beneficiary if you can. And use legal names rather than descriptions like “my children,” which invite arguments later.
Sign the deed in front of a notary. Then file it with the county clerk where the property is located. Recording fees run around $25 for the first page and $4 per additional page, with slight variation by county.
Naming a Beneficiary for a Vehicle
For a vehicle, you file Form VTR-121 (Beneficiary Designation for a Motor Vehicle) along with an Application for Texas Title (Form 130-U) at your county tax assessor-collector’s office.6Texas Department of Motor Vehicles. Beneficiary Designation for a Motor Vehicle The form asks for the VIN, year, make, model, and body style, plus the beneficiary’s full legal name. Government-issued ID details for the beneficiary are listed as optional.
The title application fee is $28 or $33. Once processed, the beneficiary’s name appears on the vehicle title. The paperwork has to be submitted before the owner dies; a completed but unfiled form does nothing.
Setting Up a POD or TOD Account at a Bank or Brokerage
Financial account designations are the simplest of the three. Your bank, credit union, or brokerage has its own beneficiary form, so contact the institution directly. You retain full access to the account during your lifetime, and the beneficiary receives nothing until you die.
Community Property and Joint Ownership Complications
Texas is a community property state, and that trips people up. If you and your spouse own a home as community property and you sign a TOD deed alone, you transfer only your half. Your spouse keeps their share regardless of what your deed says.7Texas Law Help. Transfer on Death Deeds (TODDs) To transfer the whole property, both spouses have to sign.
Joint tenancy with right of survivorship works differently. When one joint owner dies, the surviving joint owner automatically inherits the deceased owner’s share, and a TOD deed does not override that. For jointly owned property, a TOD deed only matters if every joint owner signs it, and revoking it later requires the agreement of all surviving joint owners.1Justia. Texas Estates Code Chapter 114 – Transfer on Death Deed
Changing or Revoking a Designation
For a real property TOD deed, Texas gives you two ways to revoke: record a new TOD deed that either expressly revokes the old one or covers the same property inconsistently, or record a separate written instrument of revocation.1Justia. Texas Estates Code Chapter 114 – Transfer on Death Deed Either document must be notarized and recorded in the same county before you die. A will cannot revoke a TOD deed, no matter what it says.8Texas Legislature Online. Texas Senate Bill 462 – Texas Real Property Transfer on Death Act Selling or conveying the property during your lifetime also voids the TOD deed as to the interest you transferred.
Divorce deserves its own warning. A divorce does not automatically revoke a TOD deed naming your former spouse. The deed is revoked as to the ex-spouse only if the divorce judgment is recorded in the county deed records before your death.1Justia. Texas Estates Code Chapter 114 – Transfer on Death Deed If you divorce and never record the judgment, the deed can still pay out to your former spouse. After any divorce, check every beneficiary designation you have.
To change a vehicle beneficiary, submit a new Form VTR-121 with a new title application, fee, and your current Texas title at the tax assessor-collector’s office. For bank and brokerage accounts, contact the institution and update the beneficiary form on file.
What the Beneficiary Does After the Owner Dies
For real estate, property passing under a TOD deed is not part of the probate estate, so probate isn’t required.1Justia. Texas Estates Code Chapter 114 – Transfer on Death Deed But the title doesn’t update on its own. The beneficiary files an affidavit with the county clerk that includes a certified copy of the death certificate, the property’s legal description, and confirmation of the relationship to the deceased owner. Filing promptly, within the months after death, helps establish clear title.
One survival rule matters here. A named beneficiary who does not outlive the owner by at least 120 hours (five days) is treated as having predeceased the owner, and that share lapses under anti-lapse rules similar to those used for wills.1Justia. Texas Estates Code Chapter 114 – Transfer on Death Deed If no named beneficiary survives, the property will likely go through probate after all.
For a vehicle, the beneficiary has 180 days from the owner’s death to apply for a new title at the county tax assessor-collector’s office, with proof of death such as a certified death certificate.2State of Texas. Texas Transportation Code TRANSP 501.0315 For a POD or TOD account, the beneficiary brings a certified death certificate and personal ID to the bank or brokerage, and the institution releases the funds or re-titles the account.
Debts, Liens, and Taxes
Skipping probate does not mean skipping the deceased owner’s debts. A beneficiary who receives real property through a TOD deed takes it subject to every mortgage, lien, encumbrance, and security interest attached at the time of death.9State of Texas. Texas Estates Code EST 114.104 If there was a mortgage on the house, the beneficiary inherits the house with the mortgage still attached.
On the federal tax side, a TOD deed is not a completed gift while you’re alive, so it doesn’t trigger gift tax or a Form 709 filing. When the owner dies, property passing through a TOD deed gets a stepped-up basis: the beneficiary’s cost basis resets to the property’s fair market value on the date of death.10Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent That erases the capital gains tax on appreciation during the owner’s lifetime. In a community property state like Texas, when one spouse dies, both halves of community property get the step-up, not just the deceased spouse’s half. Texas has no state estate or inheritance tax.