12 Ways To Transfer Real Estate On Death In Texas

12 Ways To Transfer Real Estate On Death In Texas

There are numerous ways to transfer real estate upon death depending on the facts and the type of planning – if any. The following are 12 of the ways property is transferred at death:

  1. Executor’s Deed.

When the deceased has a will that has been admitted to probate (a court order saying the will is valid) and an executor has been appointed, the real estate is transferred pursuant to the will by an Executor’s Deed.

  1. Administrator’s Deed.

Sometimes when there is no will or only a copy of the will can be located, an independent administrator may be appointed by the court. If a copy of the will is admitted to probate, then the administrator signs an Administrator’s Deed to transfer the property pursuant to the will similar to an Executor’s Deed. If there is no will, the administrator conveys the property to the heirs of the deceased as determined by state law.

  1. Muniment of Title.

If the deceased had a will and there were no debts owed by the estate and there is no need to transfer assets or other real estate, there is a shortened (and less expensive) probate process where no executor or administrator is appointed. Typically, the court order admitting the will to probate and the will are filed in the deed records where the property is located. So, for example, if the deceased had children from a prior relationship and the will states the real estate is to go to the surviving spouse, the surviving spouse may want the will probated as a muniment of title so he or she would be sole owner of the real estate (typically the homestead). Otherwise, the surviving spouse would be co-owners of the property with the children of the deceased as determined by the laws of intestacy if the will wasn’t probated. A surviving spouse, in this situation, would not automatically be entitled to own the property outright if the will was not probated.

  1. Assumption Deed.

Sometimes the deceased still owed a mortgage (i.e. FAA or VA loan) at the time of death. The Executor could deed the property to the beneficiary who assumes the mortgage on the property being transferred.

  1. Trustee’s Deed.

If the deceased transferred his or her real estate to a trust (typically done to avoid the court probate process and make it easier for the beneficiary or beneficiaries), the Trustee would sign a Trustee’s Deed to convey the property to the beneficiaries pursuant to the trust.

  1. Transfer on Death Deed.

An owner of real estate sometimes signs a deed that automatically is transferred to the beneficiary upon death avoiding probate. The owner could also name contingent beneficiaries. However, the deed gives no warranty of title (no guarantee) and could be subject to creditor’s claims. If the assets of an estate are not big enough to pay creditors, the Executor or Administrator may take the property and sell it to pay creditors. As a result, some title companies may delay a closing if the grantee (beneficiaries) attempts to sell the property through a title company. There are several other requirements that should be considered before selecting this option.

  1. Life Estate Deed.

A deed that can give a warranty of title to the beneficiary (grantee) that retains lifetime use by the owner. The beneficiary could have an immediate remainder interest in the property (depending on the language of the deed). If that is the case, the consent of the remainder beneficiary would be needed to sell or mortgage the property.

  1. Enhanced Life Estate (Ladybird) Deed.

Unlike the life estate deed above, the owner retains total control of the property until death. This type of deed typically states there is no need to get the consent of the remainder beneficiary if the owner decides to sell or mortgage the property. The Transfer on Death Deed, Life Estate Deed and the Ladybird Deed all avoid Medicaid Estate Recovery (the right of the state to make a claim against the property to the extent any Medicaid benefits are advanced – i.e., nursing home costs and drugs, etc.) as there is no need to probate those deeds. Under the Texas Medicaid programs, the state only goes after assets that pass by will or intestacy.

  1. Guardianship Deed.

If the deceased was disabled and there was a guardian of his or her estate at the time of death, then the guardian of the estate would sign the deed after as a temporary administrator of the estate.

  1. Dependent Administrator’s Deed.

This deed is similar to an Independent Administrator’s Deed except court authority is needed prior to the sale of the property. The dependent administrator would need to: (1) apply to the court to sell the property, (2) get an order approving the property to be sold, (3) give a report to the court would need to be made after the sale, and (4) have a decree of the sale be signed by the court.

  1. Affidavit of Heirship.

This doesn’t actually transfer property to the heirs of the deceased, but it is a presumption of evidence after 5 years as to the heirs owning the property. Title companies often recognize this when underwriting titles, but the requirements of title companies differ. Since the affidavit must state that there are no debts owed by the estate, some title companies will not recognize until after several years after the decedent’s death due to the fear that there could be creditors. Some title companies also require witnesses to confirm under penalty of perjury.

  1. Small Estate Affidavit.

In situations where there is no will and there is a surviving spouse or child of the deceased who is living in the homestead of the deceased which is considered the homestead of the surviving spouse or child, then (if the other assets of the estate are less than $75,000), a small estates affidavit can be filed with the court and an order of the court would transfer the property to the heir using the property as his or her homestead.
The list above is not an all-inclusive list of ways property can be transferred at death. However, it’s usually best to plan to make sure it is as easy as possible for your real estate to pass to your beneficiary. As in all planning, options vary upon the facts and goals of the property owner.
If interested in learning more about this article or other estate planning, Medicaid and public benefits planning, probate, etc., attend one of our free upcoming Estate Planning Essentials workshops by clicking here or calling 214-720-0102. We make it simple to attend and it is without obligation.

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