Transfer on Death Deed in Texas: Filing, Revocation, and Beneficiaries

A Transfer on Death Deed in Texas is a recorded deed that lets a property owner name someone to inherit real estate at death without probate, while keeping full ownership and control during life. It’s authorized by Texas Estates Code Chapter 114, and it works only if it’s drafted to statutory standards, signed and notarized, and recorded with the county clerk before the owner dies.¹

What the Deed Does While You’re Alive

The deed sits dormant until your death. The person you name has no legal interest in the property while you’re living, so you don’t need their permission to sell, refinance, lease, or mortgage the home. The property is also not exposed to the beneficiary’s creditors during your lifetime.¹

Signing a TODD does not trigger federal gift tax. The IRS treats revocable transfers where the owner keeps full control as incomplete gifts that stay in the owner’s gross estate, not as completed lifetime gifts.²

Requirements for a Valid Deed

Under Texas Estates Code Section 114.055, a TODD must contain the essential elements of a recordable deed, state that the transfer happens at the owner’s death, and be recorded in the county where the property sits before the owner dies.¹

In practice that means a written document, signed by the owner, and acknowledged before a notary. Use the full legal description from the current deed, not the shorthand version on the tax statement. Include the beneficiary’s full legal name. A defective legal description or a missing notarization can void the whole deed.

Texas provides a statutory form that meets these requirements. County law libraries and Texas Law Help publish fillable versions. The form includes options for naming alternate beneficiaries and directing how shares pass if a beneficiary dies before the owner.

Community Property and Joint Ownership

Texas is a community property state, and you can only transfer the share you actually own. If you and your spouse own the home together and only you sign a TODD, only your half passes to the beneficiary. To transfer the whole property, both spouses need to sign.

Joint owners with right of survivorship face another wrinkle. If another joint owner survives you, the property passes to that owner automatically, and your TODD has no effect. It only operates if you’re the last surviving joint owner. When multiple joint owners with survivorship rights sign a TODD together, all living joint owners must agree to revoke it.¹

Filing the Deed With the County Clerk

A signed and notarized TODD that sits in a drawer does nothing. It has to be recorded with the county clerk where the property is located, and the recording must happen before the owner dies. An unrecorded deed is completely ineffective no matter how carefully it was drafted.¹

You can file in person or by mail. Recording fees typically run between $50 and $150 depending on the county and the number of pages. Notary fees for the acknowledgment are usually modest. Budget roughly $75 to $200 for the entire filing process, though costs vary.

Naming Beneficiaries

You can name one or more beneficiaries on a single deed. If you name several and the deed doesn’t specify a different split, they inherit equal undivided shares with no right of survivorship among them.¹

A beneficiary must survive you by at least 120 hours (five days) for the transfer to take effect. If a beneficiary dies before you or fails to survive that window, the share lapses. What happens next depends on how the deed is drafted. The statutory form lets you choose whether a deceased beneficiary’s share passes to that person’s children or to the surviving beneficiaries. If you name no alternate and no beneficiary survives you, the TODD fails and the property passes through probate like any other asset.¹

Naming at least one alternate is the simplest protection against that outcome.

Changing or Revoking the Deed

You can revoke or change a TODD anytime before you die. Texas Estates Code Section 114.057 gives you two methods.¹

The first is to record a new TODD for the same property. A later deed revokes the earlier one, either by saying so expressly or simply by being inconsistent with it. This is the usual approach when you want to change beneficiaries.

The second is to record a standalone instrument of revocation that expressly cancels the prior deed. It must be signed, notarized, and recorded in the same county before your death.

Both methods share the same hard rule: the revoking document must be acknowledged after the original deed was acknowledged, and it must be recorded before you die. A revocation stuffed in an envelope with instructions to file it after death accomplishes nothing.

A will cannot revoke or override a TODD. This catches people off guard. If your will leaves the house to your daughter but your recorded TODD names your son, the son takes the property. The TODD controls.

Divorce

If you named your spouse as beneficiary and later divorce, the final divorce judgment operates to revoke the TODD as to your ex-spouse, but only if notice of that judgment is recorded in the county deed records before you die. A divorce alone, without recording notice, may leave the deed intact.¹

Selling the Property

If you sell the property during your lifetime, the TODD becomes irrelevant because you no longer own the real estate at death. The statute expressly says it does not limit the effect of a lifetime transfer.¹

What the Beneficiary Does After the Owner Dies

At the owner’s death, the property passes to the surviving beneficiary outside of probate. No court order is needed, and the property is not part of the probate estate.¹

The beneficiary still needs to clear the title in public records. The standard step is filing an Affidavit of Death with the county clerk where the property sits. To later sell or use the property as collateral, a title company will also want a certified death certificate. Until these documents are recorded, the deed records still show the deceased owner’s name, which makes selling or refinancing difficult.

One detail worth flagging: a TODD transfers whatever interest the owner actually held at death, with no warranty of title, even if the form’s language suggests otherwise.¹

Title Insurance

Some title companies treat TODD-transferred property with extra caution, especially when multiple TODDs were recorded over the years. The concern is that stacked deeds can create ambiguity about who holds a valid interest. In those situations, a title company may require quitclaim deeds from every person who was ever named as a beneficiary before it will insure the title. That adds cost and delay when the beneficiary tries to sell. Texas’s statute is relatively new and underwriting practices are still evolving.

Mortgages Pass With the Property

Inheriting a home through a TODD does not erase the mortgage. The beneficiary takes the property subject to all existing liens, and the loan balance becomes their responsibility if they want to keep the home.

The lender cannot call the loan due just because the property transferred at death. Federal law prohibits lenders from enforcing due-on-sale clauses when property passes to a relative because of the borrower’s death, so long as the property is a residence with fewer than five units.³

Federal servicing rules also require the mortgage servicer to work with a confirmed successor. Once you establish your identity and ownership interest, the servicer must treat you as the borrower for escrow, loss mitigation, and most other servicing purposes. You can request loan information and submit error notices even before the full confirmation process is complete.⁴

Contact the servicer promptly after the owner’s death, provide the death certificate and your recorded Affidavit of Death, and ask what else they need to confirm you as successor. Delays here can lead to missed payments and avoidable foreclosure risk.

Tax Basis for the Beneficiary

Property received through a TODD qualifies for a stepped-up basis under federal law. The beneficiary’s basis resets to the property’s fair market value on the date of the owner’s death rather than what the owner originally paid. If the owner bought the house for $80,000 and it was worth $350,000 at death, the beneficiary’s basis is $350,000. A quick sale near that value would produce little or no capital gains tax.⁵

Texas community property gets a better result than separate-property states. When one spouse dies, both halves of community property are eligible for a basis step-up, not just the deceased spouse’s half.⁵

Creditor Claims and Medicaid Recovery

A TODD does not shield the property from the deceased owner’s creditors. If the probate estate lacks enough assets to cover debts, administration expenses, or estate taxes, the personal representative can reach the TODD-transferred property to satisfy those obligations. Other creditors, surviving spouses, and minor or incapacitated children can also bring claims if the personal representative does not act within 90 days of a payment demand.¹

Any lawsuit to enforce these claims must be filed within two years of the owner’s death. After that window closes, the beneficiary’s title is generally secure from estate creditors.¹

Medicaid Estate Recovery

Texas’s Medicaid Estate Recovery Program (MERP) seeks repayment from the estates of people who received Medicaid long-term care benefits after age 55. Federal law requires states to recover from the probate estate and lets them optionally expand recovery to non-probate assets.⁶

The Texas TODD statute expressly provides that property transferred by a TODD is not part of the probate estate for any purpose, including Medicaid recovery under Government Code Section 546.0403.¹ Texas has not adopted the expanded estate definition that would let MERP reach non-probate transfers, so property passing through a properly recorded TODD is generally beyond MERP’s reach. Federal rules also protect certain survivors regardless: recovery is prohibited if the Medicaid recipient is survived by a spouse, a child under 21, or a blind or permanently disabled child.⁷

1
State of Texas. Texas Estates Code Chapter 114 – Transfer on Death Deed
2
Internal Revenue Service. Collecting Gift Tax and Generation-Skipping Transfer Tax
3
Office of the Law Revision Counsel. 12 U.S. Code 1701j-3 – Preemption of Due-on-Sale Prohibitions
4
eCFR. Subpart C – Mortgage Servicing
5
Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent
6
Office of the Law Revision Counsel. 42 U.S. Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
7
ASPE. Medicaid Treatment of the Home: Determining Eligibility and Repayment for Long-Term Care