11/16/2015
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TRANSFER ON DEATH DEED, SURVIVORSHIP AGREEMENTS,
LADY BIRD DEEDS
Michael Lucksinger
Counsel/Owner
Highland Lakes Title
2015 TEXAS LAND TITLE INSTITUTE
The New Transfer on Death Deed Statute
Senate Bill 462 Effective Sept 1, 2015
Creates New Texas Estates Code Ch 114
Now more than 25 states with a TODD
Part of increase in ‘self-help’ legislation
2015 TEXAS LAND TITLE INSTITUTE
11/16/2015
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TODD Statute Provisions to Note
“Optional” Form in Statute with specific instructions for completion & revocation
TODD must state transfer to designated beneficiary occurs at owner’s death
Must be signed in presence of a notary
Revocable regardless of contrary provision in the TODD or another instrument
Must be recorded before owner’s death in county records
Effective without notice to or acceptance by beneficiary
2014 TEXAS LAND TITLE INSTITUTE
TODD Statute Provisions to Note
May NOT be created using a power of attorney
Revoked by revocation filed in county records or by creating and filing a TODD with different beneficiaries
A will may not revoke or supersede a TODD
TODD is a non-testamentary instrument. Capacity to make or revoke same as a contract
For a TODD signed by joint owners, a revocation by one joint owner affects only that joint owner’s interest
2014 TEXAS LAND TITLE INSTITUTE
11/16/2015
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TODD Statute Provisions to Note
A TODD does NOT:
Affect an owner’s right to sell, transfer, encumber the property
Affect creditor’s rights to the property
Trigger a “due on sale” clause
Affect homestead rights
Override a joint owner right of survivorship agreement
Invoke statutory real estate notices or disclosures
Subject the property to claims of a beneficiary’s creditors
2014 TEXAS LAND TITLE INSTITUTE
TODD Title Insurance Issues
Underwriting Requirements:
Confirmation the TODD filed before the owner’s death
Closely review any divorce of a TODD owner and that divorce decree or notice of decree was filed in county records before the owner’s death
If owner’s estate probated, to check will for bequest of the property to another beneficiary
If sale by beneficiary within 2 years after owner’s death to confirm payment of estate debts
A title policy may not be issued to a TODD beneficiary
2014 TEXAS LAND TITLE INSTITUTE
11/16/2015
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TODD Beneficiary Disclaimer
Disclaimers- The interest of the designated beneficiary may be disclaimed as provided by Ch 122 of the Estates Code, and recorded in the county records per Texas Property Code § 240.105(c)(2)
2014 TEXAS LAND TITLE INSTITUTE
TODD Statute Provisions to Note
Effective on the death of an owner-
The TODD transfers title to the designated beneficiary if the beneficiary survives the owner by 120 hours
For multiple beneficiaries- the interests pass in undivided shares, and if one beneficiary dies, the deceased beneficiary’s share lapses
The TODD transfers the owner’s title without covenants of warranty of title even if the TODD contains a contrary provision
2014 TEXAS LAND TITLE INSTITUTE
11/16/2015
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Questions Concerning Use of a TODD
Convey interests other than fee simple?
Can minor children be named as beneficiaries?
Can a charity or trust be named as beneficiary?
What happens if owner names another beneficiary in the owner’s will?
Can a beneficiary include the TODD property in their will?
Can a TODD create restrictive covenants or easements?
2014 TEXAS LAND TITLE INSTITUTE
The TODD v. the “Lady Bird” Deed
Origin and purpose of a “Lady Bird” Deed (LBD)
TODD statute §114.106(b) specifically provides that property conveyed by a TODD is not considered property of the owner’s probate estate for any purpose including Texas Govt Code §531.077 (Medicaid Estate Recovery Program)
If owner NCM, then can still use the LBD
Questions regarding continuation of title insurance coverage of the TODD v. the LBD
2014 TEXAS LAND TITLE INSTITUTE
11/16/2015
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Survivorship Agreements for Joint Owners
Rights of survivorship between joint owners may be accomplished by a written agreement between the joint owners in accordance with §11.001 Texas Estates Code.
Different for married couples owning community property. Spouses must comply with Texas Estates Code Chapter 112
Revocation must be by all joint owners or as provided in the agreement
Title Insurance Issues may still be encountered
2014 TEXAS LAND TITLE INSTITUTE
Passing Title by Use of a Trust
Well accepted practice to use an inter vivos trust agreement to hold and pass title to real estate at death to trust beneficiaries
Standard warranty deed normally use to transfer title to the trust (if homestead, reserve rights & exemptions)
Title insurance issues-
Coverage continued under §2703.101(g) of the Texas Title Insurance Act
Underwriting requirements are fairly standard among title insurance underwriters
2014 TEXAS LAND TITLE INSTITUTE