The Texas legislature has passed and sent to the Governor S.B. No. 462, originally introduced by Senator Joan Huffman of Houston, named the “Texas Real Property Transfer on Death Act.” As the name of the statute implies, it provides a method for a person (grantor) to execute and record a deed that has no legal effect until the grantor dies. It also provides rules for revoking the deed.
While the concept of this law seems to be a good one, the actual text of the statute creates a number of thorny problems. It would have been so much easier to have made probate even simpler and quicker than it is than to create another myriad of opportunities for lawsuits through a statute like this. But for families without the resources to probate whatever Will may exist, this statute does offer a possibility for a simple way to dispose of real property at death.
The statute goes into effect September 1, 2015 and applies only to deeds executed on or after that date and only with respect to the grantor of a deed who likewise dies on or after September 1, 2015. Transfer on death deeds are revocable regardless of whether the deed or some other document contains a contrary provision.
Like a will, a transfer on death deed cannot be created through a power of attorney. It has to be created and signed by the grantor. And, to be effective, it must also be recorded before the grantor dies and be recorded in the proper deed records of the county where the real property is located.
In addition, there is no requirement that the grantee know anything about the deed during the grantor’s life. And, likewise, there is no requirement that revocation of a transfer on death deed be made known to the grantee.
Revocation occurs only if a revocation is recorded. It can be part of a new transfer on death deed. The revocation document has to expressly revoke the prior conveyance and be notarized after the deed being revoked, and recording must be before the grantor dies. If the grantor conveys the real property to someone else before death, the conveyance cancels the transfer on death deed. But, again, the new deed must be recorded before the grantor dies.
One critically important thing to remember is that the grantor cannot revoke a transfer on death deed in his or her will.
As with other arrangements, if a marriage between the grantor and a designated beneficiary is dissolved after a transfer on death deed is recorded, a final judgment in the divorce revokes the transfer on death deed IF notice of the judgment is recorded BEFORE the grantor dies.
If the grantee dies before the grantor, the transfer lapses and is of no effect. But if there are two or more grantees, and one or more survive, the transfer does not lapse, and instead, Chapter 255 of the Texas Estates Code governs as though the grant were in a will.
The statute contains a form of deed for use by grantor along with instructions for its completion and use. The statute also contains a revocation for with instructions.