Houston Estate Planning and Elder Law Attorney Blog
Rental properties create steady income, but probate can freeze that cash flow when an owner dies. A Transfer on Death (TOD) deed provides a simple, low-cost way to pass Harris County rentals to your chosen beneficiaries without a court process. You keep full control during life, and your heirs receive clean title with a recorded death certificate.
Why TOD Deeds Fit Rentals So Well
You want tenants to keep paying and maintenance to continue without interruption. A TOD deed lets rent checks keep rolling because your beneficiary steps into ownership without waiting for letters testamentary. Unlike joint tenancy, a TOD deed does not give current control to your beneficiary, so you can refinance, sell, or change your mind at any time. That flexibility makes it ideal for landlords who plan to hold property long-term.
Choosing the Right Beneficiaries
Name individuals, a trust, or even an LLC you control. If you own multiple rentals, you can file separate TOD deeds with tailored beneficiaries for each address. Consider naming alternates in case a primary beneficiary dies first. When minors are involved, route title through a trust so a trustee—not a court—manages repairs, leases, and taxes until children become adults.
Drafting and Recording the Deed
Use the Texas statutory TOD form and include the full legal description, not just the street address. Sign before a notary and record the deed with the Harris County Clerk. Keep a conformed copy with your estate documents. The deed does nothing until you die, but recording it now prevents document hunting later.
Handling Mortgages, Taxes, and Insurance
A TOD deed does not violate most due-on-sale clauses because the transfer occurs at death under state law. Keep taxes current and maintain landlord policy coverage; your beneficiary will need proof of insurance to keep tenants in place. Leave written instructions for utility accounts, service providers, and lease files so management continues smoothly.
Coordinating With Your Overall Plan
Pair TOD deeds with a pour-over will and a revocable trust to capture accounts and personal property. If you own out-of-state rentals, consider a trust to avoid multiple probates. Review deeds after refinances and address changes; lenders occasionally re-record documents that alter legal descriptions. Annual tune-ups keep paperwork aligned with reality.
Avoiding Common Mistakes
Do not rely on a TOD deed alone if you have significant debts; creditors may still assert claims. Avoid listing a beneficiary who receives needs-based benefits unless a special-needs trust is involved. Finally, remember to revoke or update the deed if you sell the property or change beneficiaries—record a revocation to keep the record clear.
Pass rentals quickly and cleanly to the next generation. To put TOD deeds to work for your Harris County properties, call McCulloch & Miller, PLLC at (713) 903-7879 and map out a landlord-friendly estate plan.