Transfer on Death Deeds Part 2

This is part two of a three part series on Transfer on Death Deeds.  In part one, we learned what a Transfer on Death Deed is and how a person could validly create one.  Part two explains what options are available to a grantor after a grantor signs a Transfer on Death Deed, but the grantor has not passed away.

First and foremost, a Transfer on Death Deed (TDD for brevity) passes no rights to the beneficiary while the grantor is still alive.  Up until the grantor of a TDD passes away, the grantor has ultimate authority over their real property.  This means a grantor may: (1) revoke a TDD for any reason at all; and (2) gift, sell, or mortgage the real property which is the subject of the TDD to any person, so long as the transfer is evidenced in a writing, recorded in the county clerk’s office where the TDD is recorded, and the writing is recorded prior to the grantor passing away. 

To revoke a TDD, a grantor need only: (1) create a new TDD either expressly revoking the prior TDD, which can name a new beneficiary or it can be blank as to a new beneficiary; or (2) the grantor may create a new TDD transferring the property to another beneficiary.  Any new instrument must be recognized after the grantor acknowledges that his previous TDD is being revoked, and must be recorded before the grantor passes away in the same county clerk’s office as the previous TDD(s).

A beneficiary of property through a TDD will take full legal title even if a specific devisee for the same property is named in a WillA Will may not revoke the TDD or force the property to be given to another person not listed in the TDD as a beneficiary.  If a grantor does not revoke a TDD or transfer the property through gift, sale or mortgage during their life, the TDD will come into effect at the time the grantor passes. 

What happens if the grantor’s TDD names their spouse as a beneficiary and the parties divorce?  The grantor must record the final decree of divorce in the same county clerk’s office where the TDD is filed and must do this before the grantor passes away.  If the grantor fulfills these requirements, the TDD is automatically revoked.  If the grantor fails to record the final decree of divorce, then the TDD remains valid and the now ex-spouse will take the property when the grantor passes.

Stay tuned for more information in part three on what happens after a grantor passes.

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm.  Author Matthew Grimshaw is an attorney at the Cramp Law Firm.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


NOTE: Information for this blog series was gathered from reading the Texas Estates Code Section 114 and from the Estate Planning Developments for Texas Professionals, Frost Bank October 2016 Newsletter, written by Gerry W. Beyer.