Texas allows you to automatically transfer property upon your death without those items having to go through probate if you prepared and signed Texas Transfer on Death Deeds (TOD). This document works like a TOD designation on a bank account. A Texas estate planning attorney can draft a TOD deed for you and answer your questions about how to use this legal vehicle in your estate plan.
Here are three things you need to know about Transfer on Death Deeds in Texas:
What You Need to Know About Transfer on Death Deeds in Texas
1 – Protecting Your Property from Getting Taken by Medicaid
You can use a TOD Deed to protect your property from Medicaid reimbursement claims for long-term care. If you do not use an estate planning tool, like a Medicaid trust or a TOD Deed, and Medicaid helped to pay your nursing home expenses, the government will take your assets when you die to reimburse itself for the Medicaid benefits you received during your lifetime. Your heirs will only get an inheritance from your estate after the government receives all of its money back, that is if there is any money left in your estate at that point.
2 – Death Deeds Help Avoid Probate
Your property will automatically transfer to the person you designate at the moment of your death when you use a TOD Deed. As a result, the property never becomes part of your estate. This legal action happens just like a bank account that is payable on death (POD) or transfer on death (TOD). The person you designate, like your adult child, immediately gets the asset.
The value of the asset does not count toward the total amount of your estate. With careful planning and using clever options like a living trust and TOD Deeds, you might be able to keep a significant portion of your assets from having to go through probate. The purpose of probate is for the state to distribute your assets to the new rightful owners. If you already took care of that task, you can avoid or minimize probate.
3 – You Keep Control Throughout Your Lifetime
Depending on your situation, a TOD Deed can be a better choice for you than other legal options, like a life estate deed. When you sign a life estate deed, you lose the right ever to sell the property, take out a mortgage, revoke the deed, or give it to someone else. If you have massive medical or nursing home bills, you cannot sell the property to pay those expenses.
With a TOD Deed, however, you retain absolute control over the property as long as you are alive. You can rip up the document, sell the property, or revoke the TOD Deed and make a new one giving the property to someone else.
With a life estate, you can only get control of your property back if the person you named in the document agrees to give the asset back to you. With a TOD Deed, you can change your mind.
Your TOD Deed will only be valid if the document complies with all of the Texas legal requirements. A Texas estate planning lawyer can help you craft an integrated estate plan tailored to your specific needs and wishes. Contact the Law Office of Carey Thompson today to learn more.