Benefits of Transfer Upon Death Deed
On September 1, 2015, Texas joined the growing number of states that allow owners of real estate to transfer property to their beneficiaries outside the probate process. In Texas, we call this document a transfer upon death deed. The deed works like a beneficiary designation on a retirement plan or an insurance policy. It allows a person to name a beneficiary who will inherit their real property after they die. Generally when a person dies, their estate must be probated through a Texas court which can be a costly process. A Transfer on Death Deed allows the transfer of the property without the need for court intervention. In addition the person conveying the property can rescind the transfer at anytime before their death and appoint a new beneficiary.
One of the other great benefits of using a Transfer Upon Death Deed, besides reducing costs, is it can be used to bypass the Medicaid estate recovery program. A simple will goes through probate and subjects property to being taken by Medicaid estate recovery. Property transferred by a Transfer on Death Deed is exempt from Medicaid estate recovery because the transfer happens upon death and does not require probate court.
The Transfer on Death Deed does not replace a will. The will may still be an essential part of your estate plan especially if you have special wishes or a large amount of personal property. A Transfer on Death Dead covers only real property, like land and improvements. It is best if your will and transfer on Death Deed are consistent as to who receives your home and land. If your will and Transfer on Death Deed are inconsistent, the person named in the Transfer on Death Deed, not your will, will own your property after your death.
If you have questions about a Transfer Upon Death Deed make sure you use a competent real estate attorney. These type of deeds require special verbiage and should only be prepared by a professional. If you are considering a Transfer Upon Death Deed, contact one of our real estate attorneys at Guerra Days for a free consultation.
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