Section 114.051 of the Estates Code

Transfer on Death Deed Authorized.

An individual may transfer the individual's interest in real property to one or more beneficiaries effective at the transferor's death by a transfer on death deed.

Added 84th Leg., R.S., Ch. 841 (S.B. 462)

Editor Comments

This section of the Texas Real Property Transfer on Death Act fully adopts the substance of Section 5 of the Uniform Real Property Transfer on Death Act.

The section, the TRPTODA's cornerstone, establishes the validity of an instrument that satisfies the act's requirements. Cf. Section 114.002(a)(6) (transfer on death deed defined as "a deed authorized under this chapter and does not refer to any other deed that transfers an interest in real property on the death of an individual"); Boyles v. Gresham, 263 S.W.2d 935, 937 (Tex. 1954) (quoting with approval Thompson on Wills (3rd Ed.)) ("'Any writing or declaration by which a person undertakes to make disposition of his property or estate, to take effect after his death, is testamentary in character, and if executed in accordance with the formalities prescribed by law, is entitled to probate as a will.'").

The plain language of this section restricts the use of transfer on death deeds to individuals (i.e., natural persons). Cf. Section 114.002(a)(7) (transferor defined as "an individual who makes a transfer on death deed"). It is just as clear that beneficiaries are not required to be individuals. See Section 114.002(a)(1) (beneficiary defined as "a person who receives real property under a transfer on death deed"); Section 114.002(a)(2) (designated beneficiary defined as "a person designated to receive real property in a transfer on death deed"); and Section 114.002(a)(4) (adopting by reference the expansive definition of "person" set forth in Section 311.005 of the Government Code).

This section, in a nonsubstantive departure from the Uniform Act, expressly provides that a transferor may convey only his or her interest. Cf. Section 251.002(a), Estates Code ("Subject to limitations prescribed by law, a person competent to make a will may devise under the will all the estate, right, title, and interest in property the person has at the time of the person's death."); Davis v. E. Tex. Sav. & Loan Ass'n, 354 S.W.2d 926, 932 (Tex. 1962) ("The law presumes that a testator intends to dispose of only his own property . . . . The use of the words, 'my estate' and 'my property' in themselves indicate an intention to dispose only of the testator's own property.").

As reflected in the comment to Section 5 of the Uniform Act, the transferor's ability to limit or otherwise tailor the interest conveyed is broad: "The transferor may select any form of ownership, concurrent or successive, absolute or conditional, contingent or vested, valid under state law." Cf. Knopf v. Gray, 545 S.W.3d 542, 545 (Tex. 2018) ("Therefore, the words used in the will must only evidence intent to create what lawyers know as a life estate."); Ragland v. Wagener, 180 S.W.2d 435, 438 (Tex. 1944) ("He cannot by his will prospectively create for himself a power to dispose of his property by a later instrument not duly executed under the formalities and solemnities required of a will or codicil.").

However, a transfer on death deed may convey only a fee simple in real property located in Texas or some lesser interest (e.g., a mineral interest) in real property located in Texas. Cf. Section 114.002(a)(5) (real property defined as "an interest in real property located in this state"); Mills v. Herndon, 60 Tex. 353, 355-56 (1883) ("But as to real property the law of the place where land is situated governs, not only as to the capacity of the testator and the extent of his power to dispose of the property, but also as to the forms and solemnities necessary to give to the will its due attestation and effect.").

Whether property is real property or personal property is usually easy to determine: immovable property is generally considered to be real and movable property is generally considered to be personal. See, e.g., San Antonio Area Foundation v. Lang, 35 S.W.3d 636, 640 (Tex. 2000) ("Thus, because real property has a settled legal meaning, we need not look beyond the terms of the will to find Ruth's intent.").

But some property is not easily classified as real or personal. Cf. Pickrell v. Pickrell, 134 S.W.2d 740, 743 (Tex.Civ.App.–Amarillo 1939) ("[I]n the absence of a reservation in the deed, devise or decree, buildings and other articles affixed to or used in connection with realty in such way as to constitute appurtenances or fixtures pass as a matter of course by the conveyance, devise or decree passing the title to the realty."); In re Estate of Roloff, 143 P.3d 406, 412 (Kan.App. 2006) ("Kansas common law and statutory law state that a deed conveys all of the grantor's interest in real estate, including growing crops, if not reserved by the grantor. Consequently, a TOD deed is subject to that established law.").

One example is so-called fixtures. For residential real estate, the classification of inside items like window coverings, ceiling fans and attached appliances and outside items like storage buildings, rainwater systems and built-in cookers can sometimes be uncertain. Cf. Fixtures: What Kind of Property Are They? at 1 ("Fixtures fall somewhere between personal property and real property, but, generally, once a fixture is attached to real estate it is considered real property.").

The hardest question raised by this section is the exact meaning of the phrase "an interest in real property" that is included in the TRPTODA definition of real property. Cf. Section 114.005 ("In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to the subject matter of this chapter among states that enact a law similar to this chapter.").

Available history indicates that the corresponding Uniform Act definition was drafted to include interests in real property that are sometimes treated as personal property. See, e.g., Background and Issues Memo, 2/14/07 at 30 ("California answers this question expansively, providing that the statute applies to any interest in real property that is both transferable on the death of the owner and recordable.").

However, Section 22.030 of the Estates Code provides that "real property" does not include a real chattel. The foregoing definition was first enacted as part of the 1955 Probate Code and has never changed. See also Section 22.001 ("definition for a term provided by this chapter applies in this code unless a different meaning of the term is otherwise apparent from the context in which the term is used").

At common law, a real chattel is an interest, such as a leasehold estate, in an item of real property that is less than a freehold estate. Under the common law, a real chattel is treated as personal property despite being an interest in real property. See, e.g., Robertson v. Scott, 172 S.W.2d 478, 478-79 (Tex. 1943) ("[A]t common law a leasehold estate, of whatever its duration in years, was personal property.").

In short, it is likely but not certain that a transfer on death deed may convey a leasehold estate (a tenant's rights under a real property lease). Cf. In re Applied Chem. Magnesias Corp., 206 S.W.3d 114, 118 (Tex. 2006) ("The addition of the word 'interest' further suggests that the Legislature intended section 15.011 to be more inclusive regarding the types of real property suits subject to mandatory venue.").

In any event, it is well-established in Texas that mineral rights are real property. See, e.g., Natural Gas Pipeline Co. of America v. Pool, 124 S.W.3d 188, 192 (Tex. 2002) ("In Texas it has long been recognized that an oil and gas lease is not a 'lease' in the traditional sense of a lease of the surface of real property. In a typical oil or gas lease, the lessor is a grantor and grants a fee simple determinable interest to the lessee, who is actually a grantee.").

Therefore, a transfer on death deed may convey a mineral interest, including a royalty interest retained under a typical oil or gas lease. Cf. Toledo Soc'y for Crippled Children v. Hickok, 261 S.W.2d 692, 694 (Tex. 1953) ("[M]inerals in land or 'in place' being, by our local law, land, we are admittedly well within our rights in characterizing the mineral estates here in question as Texas land for purposes of the Conflict of Laws as well as for purely domestic purposes.").

—Steve Smith

Court Decisions

No appellate court decision has interpreted any section of the TRPTODA.

Legal Commentaries

• A Basic Conveyancing Guide For Texans at 5 ("A [TODD] is a special type of deed used to transfer real property to an individual/entity designated by the owner of the property, with the said transfer of property not occurring until the death of the real property owner.")

• How A Transfer On Death Deed Affects Medicaid Benefits at 1 ("The recipient does not become the owner of the real property until after the death of the transferring owner. This is very important when it comes to qualifying for Medicaid benefits (more on that below).")

• New Tool in the Toolbox at 3-4 ("As with most new statutes, there are some unanswered questions and potential pitfalls to avoid. . . . The statute does not say whether a transferor may give the property to a class of beneficiaries, such as, 'all of my children who survive me.'")

• Transfer on Death Deed: Information and Answers at 1 ("[T]he Texas Transfer on Death Deed law and its related forms can only be used for real property located in Texas. You will have to check the laws in the other states to determine if they have a similar deed.")

• Transfer on Death Deed, Survivorship Agreements, Lady Bird Deeds at 5 ("You might consider using the TODD if you have clients who have small royalty or mineral interests on properties located in far off counties that generate minimal or no income.")

Uniform Act Text

Section 5. Transfer on Death Deed Authorized.

An individual may transfer property to one or more beneficiaries effective at the transferor's death by a transfer on death deed.

Approved by ULC in 2009 (Uniform Act)

Uniform Act Comment

The official comments to the Uniform Act provide authoritative commentary regarding the drafters' intent.

For example, the comment to Section 5 states in part:

This section authorizes a transfer on death deed and makes it clear that the transfer is not an inter vivos transfer. The transfer occurs at the transferor's death.

The full comment is available on the Uniform Law Commission website.