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Title Tag: Texas Transfer on Death Deed (TODD) 2026: How It Works, Requirements & Step-by-Step Guide - ProbatePedia

Meta Description: Texas Transfer on Death Deed (TODD) lets you pass real property to beneficiaries without probate. Learn the statutory requirements, how to create one, how to revoke it, Medicaid look-back rules, community property considerations, and how it compares to a living trust.

Texas Transfer on Death Deed (TODD) 2026: Complete Guide

Last Updated: March 2026 • Texas Estates Code Chapter 114 | Reading time: ~12 minutes

Texas TODD at a Glance

| ContentTexas TODD Detail** | | --- | --- | | Statutory basis | Texas Estates Code Chapter 114; effective September 1, 2015 | | Property covered | Any Texas real property — homestead, investment property, rental property, vacant land, commercial property | | Who can create one | Any owner of Texas real property with capacity to contract (age 18+; or legally emancipated minor; or married minor) | | Execution requirements | Signed by the transferor (owner) + notarized; two witnesses not required for a TODD | | Recording requirement | Must be recorded with the county clerk in the county where the property is located BEFORE the transferor's death; an unrecorded TODD is void | | Beneficiary's rights during owner's lifetime | None — beneficiary has no present interest; owner can sell, mortgage, refinance, lease, or otherwise deal with the property without the beneficiary's consent | | Revocability | Fully revocable at any time — record a new TODD (supersedes the prior) or a Revocation of Transfer on Death Deed instrument | | Effect at death | Property transfers automatically to the beneficiary; beneficiary records Affidavit of Survivorship + certified death certificate | | Probate avoidance | Complete — TODD property does not go through the decedent's estate or require Letters Testamentary | | Medicaid look-back | Does NOT trigger the 60-month Medicaid look-back — no completed gift during owner's lifetime | | Federal gift tax | None — no completed gift; no gift tax return required | | Income tax basis step-up | Full step-up to date-of-death fair market value under IRC §1014 — capital gains on all pre-death appreciation eliminated | | Community property | Additional analysis required — see below; CPWROS agreement is generally preferable for married couples on community property | | Cost to create | $250–$500 attorney fee + $25 first page + $4/additional page recording fee (Texas Local Government Code §118.011) |

Who Can Use a Texas TODD

Any adult with the capacity to convey real property can create a Texas TODD. The statute specifically contemplates:

• Individual owners (single person, divorced person, widow/widower)
• Married individuals — with important community property caveats (see below)
• Tenants in common — each co-owner can execute a TODD for their individual share
• Joint tenants — each joint tenant can execute a TODD for their share, though this may affect the joint tenancy
• Trust beneficiaries who have a present possessory interest

LLC-Held Property Cannot Use a TODD:

A TODD transfers real property interests — it cannot transfer an interest in an LLC or other entity that owns real estate. If your property is held in an LLC (as many Texas investment properties are), the LLC membership interest is personal property, not real property, and must pass through a different mechanism — typically a beneficiary designation in the LLC operating agreement, or transfer of the LLC interest to a revocable living trust.

Texas TODD and Community Property — Critical Analysis

Texas is a community property state. Property acquired during marriage is community property, presumed to be owned 50/50 by both spouses. This creates an important analysis when either spouse wants to use a TODD:

| ContentTODD AnalysisContentRecommended Approach** | | --- | --- | --- | | Married couple — home is community property — one spouse wants to create TODD naming children | Each spouse can transfer only their 50% community property interest. The TODD transfers only the creating spouse's half. The surviving spouse retains their 50% community interest — which still must pass through their own estate plan. | Use a Community Property with Right of Survivorship Agreement (CPWROS) instead — passes the entire property to the surviving spouse first, then plan for second death | | Married couple — want to pass home directly to children on death of EITHER spouse | Complex — requires coordination between both spouses' estate plans. One spouse's TODD only transfers their half; the other spouse's estate plan must address the remaining half. | Joint revocable living trust is cleaner for this goal — passes entire property as directed by the trust | | Married couple — home is community property — both spouses want to create TODDs naming each other as beneficiary | Each spouse creates a TODD transferring their 50% to the surviving spouse. At first death, surviving spouse receives the deceased spouse's 50% via TODD — now owns 100% via combined TODD + own community interest. | This works — but CPWROS accomplishes the same result more cleanly and preserves community property status | | Single person — owns home separately | Straightforward — TODD transfers 100% to named beneficiary at death | Standard TODD — optimal solution; low cost; full step-up in basis | | Surviving spouse — owns home outright after first spouse's death | Straightforward — full owner can execute TODD to children or other beneficiaries | Standard TODD — optimal solution |

The Basis Step-Up Advantage with Community Property TODDs:

When a married Texas couple uses a TODD on community property, the community property full step-up in basis (IRC §1014(b)(6)) still applies at the first spouse's death — both halves of community property step up to date-of-death FMV even though the deceased spouse's half passes by TODD. This is one of the most valuable tax benefits in Texas estate planning. A beneficiary who receives community property via TODD and then sells the property shortly after the transferor's death pays zero capital gains tax on all pre-death appreciation — even if the property was purchased decades ago at a fraction of current value.

Step-by-Step: How to Create a Texas TODD

Step 1 — Obtain the Complete Legal Description

The TODD must contain the complete legal description of the property — not just the street address. The legal description is found on: (a) the current deed of record (obtain from the county clerk or appraisal district); (b) the title policy issued when you purchased the property; or (c) a property survey. Do not rely on the property address alone — the legal description is the controlling identifier.

Step 2 — Identify All Beneficiaries with Full Legal Names

Name each beneficiary with their complete legal name. If designating multiple beneficiaries:

• Specify percentage shares (e.g., 'to my children Jane Smith and John Smith, each an undivided 50% interest')
• Or specify right of survivorship among beneficiaries (e.g., 'to Jane Smith and John Smith, as joint tenants with right of survivorship')
• Designate contingent (backup) beneficiaries in case a primary beneficiary predeceases the transferor
• Consider what happens if all named beneficiaries predecease the transferor — the property will pass through the estate if no contingent beneficiary survives

Step 3 — Draft the TODD Using the Statutory Form

Texas Estates Code §114.151 provides a statutory form for TODDs. While use of the exact statutory form is not strictly required, a TODD that substantially complies with the requirements of Chapter 114 is valid. An attorney-drafted TODD ensures the community property characterization language, contingent beneficiary designations, and any special instructions are properly included. Cost: $250–$500.

Step 4 — Sign Before a Notary

The transferor (owner) must sign the TODD in the presence of a notary public. Two witnesses are not required for a Texas TODD — notarization alone satisfies the execution requirement. The beneficiary does not sign the TODD.

Step 5 — Record with County Clerk BEFORE Death

File the executed TODD with the county clerk in the county (or counties) where the property is located. Recording fees: $25 for the first page + $4 per additional page (most Texas counties). An unrecorded TODD is completely void — it has no legal effect if not recorded before the transferor's death. Record the TODD promptly after execution.

Record Immediately — Do Not Wait:

The single most common TODD failure is a signed but unrecorded deed found after the owner's death. Unlike a will (which can be offered for probate after death), a TODD that is not recorded before the transferor's death is void and has no legal effect. The property will pass through the estate as if the TODD never existed. If you execute a TODD, go directly to the county clerk's office or mail it for recording the same week.

Step 6 — Store the Recorded TODD and Inform Beneficiaries

Once recorded, you will receive the original TODD back from the county clerk with a recording stamp. Store this in a safe location with your other estate planning documents. Consider informing your named beneficiaries that a TODD exists and where to find the recorded copy — beneficiaries need to know to take action at your death.

After Death: How the Beneficiary Claims the Property

At the transferor's death, the beneficiary takes title by recording two documents with the county clerk in the county where the property is located:

| ContentPurposeContentNotes** | | --- | --- | --- | | Certified copy of the transferor's death certificate | Proves the transferor has died and the TODD has taken effect | Obtain from Texas DSHS or county vital records; $21 per certified copy; need 2–3 copies | | Affidavit of Survivorship | Sworn statement by the beneficiary confirming they survived the transferor and are entitled to the property under the TODD | Prepared and signed by the beneficiary; must be notarized; confirms no probate proceeding is pending |

Once these two documents are recorded, title passes to the beneficiary. No court proceeding, no Letters Testamentary, no probate attorney required. The county appraisal district will update the ownership records when the new owner files for exemptions (if applicable).

How to Revoke or Change a Texas TODD

A TODD is completely revocable at any time during the transferor's lifetime. Three methods:

| ContentHow It WorksContentNotes** | | --- | --- | --- | | Record a new TODD | A later-dated TODD for the same property supersedes all prior TODDs; simply execute a new TODD naming different beneficiaries and record it | Most common method; clear and unambiguous | | Record a Revocation of Transfer on Death Deed | A separate revocation instrument, executed and recorded, cancels the TODD without designating new beneficiaries; property would then pass through the estate | Use when removing all designations without replacement; Texas Estates Code §114.057 provides a statutory revocation form | | Convey the property to a third party | If the transferor sells or gifts the property during their lifetime, the sale/gift supersedes the TODD; the new owner takes free of the TODD | A sale of the property during the transferor's lifetime automatically revokes the TODD as to that property |

A Will Cannot Revoke a TODD:

A Texas will has no effect on a properly executed and recorded TODD. Even if a will states 'I leave my home at [address] to my son John,' if a TODD naming daughter Jane is on record, Jane takes the property. The TODD controls for real property, regardless of what the will says. This is why keeping TODD designations current and consistent with your overall estate plan is critical.

TODD Limitations: What It Cannot Do

| ContentImpactContentBetter Solution** | | --- | --- | --- | | Covers real property only | Financial accounts, retirement accounts, vehicles, personal property, business interests — none covered by TODD | POD/TOD designations on accounts; beneficiary designations on retirement + insurance; living trust for comprehensive coverage | | No incapacity management | TODD has no effect during transferor's lifetime; does not help if transferor becomes incapacitated | Durable Power of Attorney for financial matters; revocable living trust for seamless incapacity management | | Beneficiary must survive transferor | If all named beneficiaries predecease the transferor and no contingent beneficiary is designated, the property passes through the estate | Always name contingent beneficiaries; or use a trust to address this scenario | | No protection for minor beneficiaries | If a minor is named as beneficiary, the minor cannot legally hold real property outright; a court-supervised guardianship of property may be required | Name a trust as beneficiary (to hold for minors) or use a living trust with sub-trusts for minor beneficiaries | | No spendthrift protection | The beneficiary takes outright ownership — if they have creditors, the property is immediately exposed | A revocable living trust with spendthrift provisions provides creditor protection for the beneficiary's inherited interest | | Does not address mortgage | If there is a mortgage on the property, the beneficiary inherits the property subject to the mortgage; the mortgage does not disappear | Beneficiary must qualify for refinancing or assume the mortgage; discuss with lender in advance |

TODD vs. Living Trust: Which Is Right?

| ContentTODD OnlyContentRevocable Living Trust** | | --- | --- | --- | | Cost | $250–$500 per property + $25–$35 recording | $1,500–$4,500 for complete trust package | | Properties covered | One deed per property; each property needs its own TODD | All trust assets covered under one document | | Non-real-estate assets | Not covered; separate beneficiary designations required | All types of assets covered when funded | | Out-of-state property | Does not help; each state requires its own instrument | Single trust governs all states | | Incapacity management | None | Yes — Successor Trustee steps in automatically | | Minor beneficiaries | Guardianship risk if minor named directly | Sub-trust holds for minor; no court needed | | Privacy | County recording makes TODD public (but no asset values) | Trust terms and distributions entirely private | | Complexity | Very simple to create and maintain | Requires funding and ongoing maintenance | | Best for | Single TX property + accounts already have designations + simple family + no incapacity concern | Complex estates; multiple properties; out-of-state assets; incapacity concern; minor beneficiaries; blended family |

The TODD Is Not an Either/Or Choice:

Many Texas families use both tools. A living trust covers all assets comprehensively — and the trust document itself is transferred to the trust by a deed. But for a single homeowner with adult children, a simple estate, and no incapacity concern, the TODD + beneficiary designations + will combination achieves most of the same probate avoidance goals at a fraction of the cost. The TODD is a building block, not a complete estate plan.

Texas TODD and Medicaid Planning

The Texas TODD is Medicaid-safe for long-term care planning purposes. Because the TODD does not create a completed gift during the transferor's lifetime (the beneficiary has no present interest; the transferor can revoke at any time), it does not trigger the 60-month Medicaid look-back period applicable to long-term care (nursing home) Medicaid.

This is a significant advantage over an outright gift of the property or a deed to a trust that the transferor does not control. The TODD preserves the ability to qualify for Medicaid without sacrificing the probate avoidance benefit. After the transferor's death, the property passes to the beneficiary outside the probate estate — and Texas's Medicaid estate recovery (administered by the Texas Health and Human Services Commission, or HHSC) is generally limited to the probate estate.

Texas Medicaid Estate Recovery Is Limited to Probate Estate:

Texas HHSC Medicaid estate recovery applies to assets passing through the probate estate. Property transferred by a properly recorded and effective TODD passes outside the probate estate — meaning HHSC generally cannot recover Medicaid costs from property that passed via TODD. This is a critical planning point for Texas families whose loved one received or is expected to receive long-term care Medicaid benefits. Always consult a Texas elder law attorney for a comprehensive Medicaid planning analysis.

Frequently Asked Questions

Can a Texas TODD be used for a homestead property with a mortgage?

Yes — a TODD can be placed on a mortgaged property. The beneficiary will inherit the property subject to the existing mortgage. The TODD does not accelerate the mortgage (the due-on-sale clause typically does not apply to transfers at death by operation of law). However, the beneficiary must either assume the mortgage, refinance in their own name, or sell the property to pay off the loan. Discuss with the mortgage lender in advance about their process for post-death transfers.

What if the TODD beneficiary dies before the property owner?

If a primary beneficiary predeceases the transferor and no contingent beneficiary is named, the TODD lapses as to that beneficiary's share, and the property (or that share) passes through the transferor's estate at death — potentially going through probate. Texas Estates Code §114.101 provides that a lapsed TODD transfer passes as if the TODD had not been made, unless the TODD contains anti-lapse or contingent beneficiary provisions. Always name contingent beneficiaries to avoid this outcome.

Can an LLC or trust be named as TODD beneficiary?

Yes — both LLCs and revocable living trusts can be named as TODD beneficiaries. Naming a trust as TODD beneficiary is particularly useful when the transferor wants the property to benefit minor children, a spendthrift beneficiary, or a blended family. The property passes to the trust at death (via TODD, without probate) and the trust then governs the property per its terms — combining the cost efficiency of the TODD with the distribution flexibility of the trust.

Does the TODD need to be updated if I refinance my home?

Generally no — a Texas TODD describes the property by its legal description, not by any loan or financing associated with it. Refinancing changes the mortgage but does not change the ownership of the property, so the existing TODD remains effective after a refinance. However, if the refinance involves a new deed (such as adding a co-borrower to title), the titling change may affect the TODD's scope — review with your estate planning attorney after any significant title-related transaction.

Texas TODD — Key Reference

| ContentDetail** | | --- | --- | | Statute | Texas Estates Code Chapter 114; effective September 1, 2015 | | Execution | Signed by transferor + notarized; two witnesses not required | | ContentMust be recorded with county clerk BEFORE death — unrecorded TODD is void** | | Recording fee | $25 first page + $4 per additional page (Tex. Local Gov't Code §118.011) | | Beneficiary's rights during life | None — contingent interest only; transferor retains full control | | Revocation | Record new TODD or revocation instrument; sale during life also revokes | | At death | Beneficiary records Affidavit of Survivorship + certified death certificate; no probate | | Medicaid look-back | Does NOT trigger look-back — no completed gift | | Basis step-up | Full IRC §1014 step-up to date-of-death FMV | | Community property | Complex analysis for married couples — CPWROS often preferable | | Will override? | No — TODD controls over will for TODD-designated property | | Cost | $250–$500 attorney + $25–$35 recording |

Related TX Articles:

→ How to Avoid Probate in Texas — all 7 methods including TODD

→ Texas Community Property & Estate Planning — CPWROS and basis step-up analysis

→ Texas Revocable Living Trust — comprehensive probate avoidance and incapacity planning

✅ Texas Legal Data — Verified March 2026

• TODD: Tex. Estates Code Ch. 114; effective Sept 1, 2015; notarization only (no witnesses); must be recorded before death — confirmed

• Revocation of TODD: Tex. Estates Code §114.057 — confirmed

• Anti-lapse and lapse provisions: Tex. Estates Code §114.101 — confirmed

• Recording fees $25 first page + $4/additional: Tex. Local Gov't Code §118.011 — confirmed (county variation possible)

• Affidavit of Survivorship requirement at death — confirmed per Ch. 114 practice

• Medicaid look-back: TODD does not trigger 60-month look-back — confirmed; no completed gift

• Texas HHSC Medicaid estate recovery limited to probate estate — confirmed

• IRC §1014 full step-up in basis at death — confirmed

• Community property full step-up: IRC §1014(b)(6) — confirmed even when property passes via TODD

⚠ Editor: Verify any TODD-specific 2024–2025 legislative updates to Tex. Estates Code Ch. 114

probatepedia.com · /texas/avoid-probate/transfer-on-death-deed/ · TX-4 of 8 · v1.0 March 2026 · Data verified