Bill Text: TX SB462 | 2015-2016 | 84th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to authorizing a revocable deed that transfers real property at the transferor's death.

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Passed) 2015-06-17 - Effective on 9/1/15 [SB462 Detail]

Download: Texas-2015-SB462-Comm_Sub.html

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84R26458 CLG-F
By: Huffman, et al. S.B. No. 462
(Farrar)
Substitute the following for S.B. No. 462: No.

A BILL TO BE ENTITLED
AN ACT
relating to authorizing a revocable deed that transfers real
property at the transferor's death.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 2, Estates Code, is amended by
adding Chapter 114 to read as follows:
CHAPTER 114. TRANSFER ON DEATH DEED
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 114.001. SHORT TITLE. This chapter may be cited as the
Texas Real Property Transfer on Death Act.
Sec. 114.002. DEFINITIONS. (a) In this chapter:
(1) "Beneficiary" means a person who receives real
property under a transfer on death deed.
(2) "Designated beneficiary" means a person
designated to receive real property in a transfer on death deed.
(3) "Joint owner with right of survivorship" or "joint
owner" means an individual who owns real property concurrently with
one or more other individuals with a right of survivorship. The term
does not include a tenant in common or an owner of community
property with or without a right of survivorship.
(4) "Person" has the meaning assigned by Section
311.005, Government Code.
(5) "Real property" means an interest in real property
located in this state.
(6) "Transfer on death deed" means 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.
(7) "Transferor" means an individual who makes a
transfer on death deed.
(b) In this chapter, the terms "cancel" and "revoke" are
synonymous.
Sec. 114.003. APPLICABILITY. This chapter applies to a
transfer on death deed executed and acknowledged on or after
September 1, 2015, by a transferor who dies on or after September 1,
2015.
Sec. 114.004. NONEXCLUSIVITY. This chapter does not affect
any method of transferring real property otherwise permitted under
the laws of this state.
Sec. 114.005. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
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.
Sec. 114.006. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL
AND NATIONAL COMMERCE ACT. This chapter modifies, limits, and
supersedes the federal Electronic Signatures in Global and National
Commerce Act (15 U.S.C. Section 7001 et seq.), except that this
chapter does not modify, limit, or supersede Section 101(c) of that
Act (15 U.S.C. Section 7001(c)) or authorize electronic delivery of
any of the notices described in Section 103(b) of that Act (15
U.S.C. Section 7003(b)).
SUBCHAPTER B. AUTHORIZATION, EXECUTION, AND REVOCATION OF TRANSFER
ON DEATH DEED
Sec. 114.051. 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.
Sec. 114.052. TRANSFER ON DEATH DEED REVOCABLE. A transfer
on death deed is revocable regardless of whether the deed or another
instrument contains a contrary provision.
Sec. 114.053. TRANSFER ON DEATH DEED NONTESTAMENTARY. A
transfer on death deed is a nontestamentary instrument.
Sec. 114.054. CAPACITY OF TRANSFEROR; USE OF POWER OF
ATTORNEY. (a) The capacity required to make or revoke a transfer
on death deed is the same as the capacity required to make a
contract.
(b) A transfer on death deed may not be created through use
of a power of attorney.
Sec. 114.055. REQUIREMENTS. To be effective, a transfer on
death deed must:
(1) except as otherwise provided in Subdivision (2),
contain the essential elements and formalities of a recordable
deed;
(2) state that the transfer of an interest in real
property to the designated beneficiary is to occur at the
transferor's death; and
(3) be recorded before the transferor's death in the
deed records in the county clerk's office of the county where the
real property is located.
Sec. 114.056. NOTICE, DELIVERY, ACCEPTANCE, OR
CONSIDERATION NOT REQUIRED. A transfer on death deed is effective
without:
(1) notice or delivery to or acceptance by the
designated beneficiary during the transferor's life; or
(2) consideration.
Sec. 114.057. REVOCATION BY CERTAIN INSTRUMENTS; EFFECT OF
WILL OR MARRIAGE DISSOLUTION. (a) Subject to Subsections (d) and
(e), an instrument is effective to revoke a recorded transfer on
death deed, or any part of it, if the instrument:
(1) is one of the following:
(A) a subsequent transfer on death deed that
revokes the preceding transfer on death deed or part of the deed
expressly or by inconsistency; or
(B) except as provided by Subsection (b), an
instrument of revocation that expressly revokes the transfer on
death deed or part of the deed;
(2) is acknowledged by the transferor after the
acknowledgment of the deed being revoked; and
(3) is recorded before the transferor's death in the
deed records in the county clerk's office of the county where the
deed being revoked is recorded.
(b) A will may not revoke or supersede a transfer on death
deed.
(c) If a marriage between the transferor and a designated
beneficiary is dissolved after a transfer on death deed is
recorded, a final judgment of the court dissolving the marriage
operates to revoke the transfer on death deed as to that designated
beneficiary if notice of the judgment is recorded before the
transferor's death in the deed records in the county clerk's office
of the county where the deed is recorded, notwithstanding Section
111.052.
(d) If a transfer on death deed is made by more than one
transferor, revocation by a transferor does not affect the deed as
to the interest of another transferor who does not make that
revocation.
(e) A transfer on death deed made by joint owners with right
of survivorship is revoked only if it is revoked by all of the
living joint owners.
(f) This section does not limit the effect of an inter vivos
transfer of the real property.
SUBCHAPTER C. EFFECT OF TRANSFER ON DEATH DEED; LIABILITY OF
TRANSFERRED PROPERTY FOR CREDITORS' CLAIMS
Sec. 114.101. EFFECT OF TRANSFER ON DEATH DEED DURING
TRANSFEROR'S LIFE. During a transferor's life, a transfer on death
deed does not:
(1) affect an interest or right of the transferor or
any other owner, including:
(A) the right to transfer or encumber the real
property that is the subject of the deed;
(B) homestead rights in the real property, if
applicable; and
(C) ad valorem tax exemptions, including
exemptions for residence homestead, persons 65 years of age or
older, persons with disabilities, and veterans;
(2) affect an interest or right of a transferee of the
real property that is the subject of the deed, even if the
transferee has actual or constructive notice of the deed;
(3) affect an interest or right of a secured or
unsecured creditor or future creditor of the transferor, even if
the creditor has actual or constructive notice of the deed;
(4) affect the transferor's or designated
beneficiary's eligibility for any form of public assistance,
subject to applicable federal law;
(5) constitute a transfer triggering a "due on sale"
or similar clause;
(6) invoke statutory real estate notice or disclosure
requirements;
(7) create a legal or equitable interest in favor of
the designated beneficiary; or
(8) subject the real property to claims or process of a
creditor of the designated beneficiary.
Sec. 114.102. EFFECT OF SUBSEQUENT CONVEYANCE ON TRANSFER
ON DEATH DEED. An otherwise valid transfer on death deed is void as
to any interest in real property that is conveyed by the transferor
during the transferor's lifetime after the transfer on death deed
is executed and recorded if:
(1) a valid instrument conveying the interest is
recorded in the deed records in the county clerk's office of the
same county in which the transfer on death deed is recorded; and
(2) the recording of the instrument occurs before the
transferor's death.
Sec. 114.103. EFFECT OF TRANSFER ON DEATH DEED AT
TRANSFEROR'S DEATH. (a) Except as otherwise provided in the
transfer on death deed, this section, or any other statute or the
common law of this state governing a decedent's estate, on the death
of the transferor, the following rules apply to an interest in real
property that is the subject of a transfer on death deed and owned
by the transferor at death:
(1) if the designated beneficiary survives the
transferor by 120 hours, the interest in the real property is
transferred to the designated beneficiary in accordance with the
deed;
(2) the interest of a designated beneficiary that
fails to survive the transferor by 120 hours lapses,
notwithstanding Section 111.052;
(3) subject to Subdivision (4), concurrent interests
are transferred to the beneficiaries in equal and undivided shares
with no right of survivorship; and
(4) notwithstanding Subdivision (2), if the
transferor has identified two or more designated beneficiaries to
receive concurrent interests in the real property, the share of a
designated beneficiary who predeceases the transferor lapses and is
subject to and passes in accordance with Subchapter D, Chapter 255,
as if the transfer on death deed were a devise made in a will.
(b) If a transferor is a joint owner with right of
survivorship who is survived by one or more other joint owners, the
real property that is the subject of the transfer on death deed
belongs to the surviving joint owner or owners. If a transferor is
a joint owner with right of survivorship who is the last surviving
joint owner, the transfer on death deed is effective.
(c) If a transfer on death deed is made by two or more
transferors who are joint owners with right of survivorship, the
last surviving joint owner may revoke the transfer on death deed
subject to Section 114.057.
(d) A transfer on death deed transfers real property without
covenant of warranty of title even if the deed contains a contrary
provision.
Sec. 114.104. TRANSFER ON DEATH DEED PROPERTY SUBJECT TO
LIENS AND ENCUMBRANCES AT TRANSFEROR'S DEATH; CREDITORS' CLAIMS.
(a) Subject to Section 13.001, Property Code, a beneficiary takes
the real property subject to all conveyances, encumbrances,
assignments, contracts, mortgages, liens, and other interests to
which the real property is subject at the transferor's death. For
purposes of this subsection and Section 13.001, Property Code, the
recording of the transfer on death deed is considered to have
occurred at the transferor's death.
(b) If a personal representative has been appointed for the
transferor's estate, an administration of the estate has been
opened, and the real property transferring under a transfer on
death deed is subject to a lien or security interest, including a
deed of trust or mortgage, the personal representative shall give
notice to the creditor of the transferor as the personal
representative would any other secured creditor under Section
308.053. The creditor shall then make an election under Section
355.151 in the period prescribed by Section 355.152 to have the
claim treated as a matured secured claim or a preferred debt and
lien claim, and the claim is subject to the claims procedures
prescribed by this section.
(c) If the secured creditor elects to have the claim treated
as a preferred debt and lien claim, Sections 355.154 and 355.155
apply as if the transfer on death deed were a devise made in a will,
and the creditor may not pursue any other claims or remedies for any
deficiency against the transferor's estate.
(d) If the secured creditor elects to have the claim treated
as a matured secured claim, Section 355.153 applies as if the
transfer on death deed were a devise made in a will, and the claim is
subject to the procedural provisions of this title governing
creditor claims.
Sec. 114.105. DISCLAIMER. A designated beneficiary may
disclaim all or part of the designated beneficiary's interest as
provided by Chapter 122.
Sec. 114.106. LIABILITY FOR CREDITOR CLAIMS; ALLOWANCES IN
LIEU OF EXEMPT PROPERTY AND FAMILY ALLOWANCES. (a) To the extent
the transferor's estate is insufficient to satisfy a claim against
the estate, expenses of administration, any estate tax owed by the
estate, or an allowance in lieu of exempt property or family
allowance to a surviving spouse, minor children, or incapacitated
adult children, the personal representative may enforce that
liability against real property transferred at the transferor's
death by a transfer on death deed to the same extent the personal
representative could enforce that liability if the real property
were part of the probate estate.
(b) Notwithstanding Subsection (a), real property
transferred at the transferor's death by a transfer on death deed is
not considered property of the probate estate for any purpose,
including for purposes of Section 531.077, Government Code.
(c) If a personal representative does not commence a
proceeding to enforce a liability under Subsection (a) on or before
the 90th day after the date the representative receives a demand for
payment, a proceeding to enforce the liability may be brought by a
creditor, a distributee of the estate, a surviving spouse of the
decedent, a guardian or other appropriate person on behalf of a
minor child or adult incapacitated child of the decedent, or any
taxing authority.
(d) If more than one real property interest is transferred
by one or more transfer on death deeds or if there are other
nonprobate assets of the transferor that may be liable for the
claims, expenses, and other payments specified in Subsection (a),
the liability for those claims, expenses, and other payments may be
apportioned among those real property interests and other assets in
proportion to their net values at the transferor's death.
(e) A proceeding to enforce liability under this section
must be commenced not later than the second anniversary of the
transferor's death, except for any rights arising under Section
114.104(d).
(f) In connection with any proceeding brought under this
section, a court may award costs and reasonable and necessary
attorney's fees in amounts the court considers equitable and just.
SUBCHAPTER D. FORMS FOR TRANSFER ON DEATH DEED
Sec. 114.151. OPTIONAL FORM FOR TRANSFER ON DEATH DEED. The
following form may be used to create a transfer on death deed.
REVOCABLE TRANSFER ON DEATH DEED
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU
MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS
INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
IMPORTANT NOTICE TO OWNER: You should carefully read all the
information included in the instructions to this form. You may want
to consult a lawyer before using this form.
MUST RECORD DEED: Before your death, this deed must be recorded with
the county clerk where the property is located, or it will not be
effective.
MARRIED PERSONS: If you are married and want your spouse to own the
property on your death, you must name your spouse as the primary
beneficiary. If your spouse does not survive you, the property will
transfer to any listed alternate beneficiary or beneficiaries on
your death.
1. Owner (Transferor) Making this Deed:
___________________________ ____________________
Printed name Mailing address
2. Legal Description of the Property:
___________________________________________________
3. Address of the Property (if any) (include county):
___________________________________________________
4. Primary Beneficiary (Transferee) or Beneficiaries
(Transferees)
I designate the following beneficiary or beneficiaries, if
the beneficiary survives me:
___________________________ ____________________
Printed name Mailing address
5. Alternate Beneficiary or Beneficiaries (Optional)
If no primary beneficiary survives me, I designate the
following alternate beneficiary or beneficiaries:
___________________________ ____________________
Printed name Mailing address
6. Transfer on Death
At my death, I grant and convey to the primary beneficiary or
beneficiaries my interest in the property, to have and hold
forever. If at my death I am not survived by any primary
beneficiary, I grant and convey to the alternate beneficiary or
beneficiaries, if designated, my interest in the property, to have
and hold forever. If the primary and alternate beneficiaries do not
survive me, this transfer on death deed shall be deemed canceled by
me.
7. Printed Name and Signature of Owner Making this Deed:
___________________________ ____________________
Printed Name Date
___________________________
Signature
BELOW LINE FOR NOTARY ONLY
Acknowledgment
STATE OF ____________________
COUNTY OF ___________________
This instrument was acknowledged before me on the ______ day of
______________, 20____,
by ___________________.
Notary Public, State of
After recording, return to:
(insert name and mailing address)
________________________________
________________________________
INSTRUCTIONS FOR TRANSFER ON DEATH DEED
DO NOT RECORD THESE INSTRUCTIONS
Instructions for Completing the Form
1. Owner (Transferor) Making this Deed: Enter your first, middle
(if any), and last name here, along with your mailing address.
2. Legal Description of the Property: Enter the formal legal
description of the property. This information is different from the
mailing and physical address for the property and is necessary to
complete the form. To find this information, look on the deed you
received when you became an owner of the property. This information
may also be available in the office of the county clerk for the
county where the property is located. Do NOT use your tax bill to
find this information. If you are not absolutely sure, consult a
lawyer.
3. Address of the Property: Enter the physical address of the
property.
4. Primary Beneficiary or Beneficiaries: Enter the first and last
name of each person you want to get the property when you die. If you
are married and want your spouse to get the property when you die,
enter your spouse's first and last name (even if you and your spouse
own the property together).
5. Alternate Beneficiary or Beneficiaries: Enter the first and
last name of each person you want to get the property if no primary
beneficiary survives you.
6. Transfer on Death: No action needed.
7. Printed Name and Signature of Owner: Do not sign your name or
enter the date until you are before a notary. Include your printed
name.
8. Acknowledgment: This deed must be signed before a notary. The
notary will fill out this section of the deed.
Sec. 114.152. OPTIONAL FORM OF REVOCATION. The following
form may be used to create an instrument of revocation under this
chapter.
CANCELLATION OF TRANSFER ON DEATH DEED
IMPORTANT NOTICE TO OWNER: You should carefully read all the
information included in the instructions to this form. You may want
to consult a lawyer before using this form.
MUST RECORD FORM: Before your death, this cancellation form must be
recorded with the county clerk where the property is located, or it
will not be effective. This cancellation is effective only as to the
interests in the property of owners who sign this cancellation
form.
1. Owner (Transferor) Making this Cancellation:
______________________ ________________________
Printed name Mailing address
2. Legal Description of the Property:
______________________________________________________
3. Address of the Property (if any) (include county):
______________________________________________________
4. Cancellation
I cancel all my previous transfers of this property by
transfer on death deed.
5. Printed Name and Signature of Owner (Transferor) Making this
Cancellation:
_________________________ ________________________
Printed Name Date
_________________________
Signature
BELOW LINE FOR NOTARY ONLY
________________________________________________________________
Acknowledgment
STATE OF __________________
COUNTY OF _________________
This instrument was acknowledged before me on the ___ day of
__________, 20______,
by ____________________________.
_______________________________
Notary Public, State of ________
After recording, return to:
(insert name and mailing address)
_________________________________
_________________________________
INSTRUCTIONS FOR CANCELING A TRANSFER ON DEATH (TOD) DEED
DO NOT RECORD THESE INSTRUCTIONS
Instructions for Completing the Form
1. Owner (Transferor) Making this Cancellation: Enter your first,
middle (if any), and last name here, along with your mailing
address.
2. Legal Description of the Property: Enter the formal legal
description of the property. This information is different from the
mailing and physical address for the property and is necessary to
complete the form. To find this information, look on the deed you
received when you became an owner of the property. This information
may also be available in the office of the county clerk for the
county where the property is located. Do NOT use your tax bill to
find this information. If you are not absolutely sure, consult a
lawyer.
3. Address of the Property: Enter the physical address of the
property.
4. Cancellation: No action needed.
5. Printed Name and Signature of Owner: Do not sign your name or
enter the date until you are before a notary. Include your printed
name.
6. Acknowledgment: This cancellation form must be signed before a
notary. The notary will fill out this section of the form.
SECTION 2. Section 22.027(b), Estates Code, is amended to
read as follows:
(b) Except as otherwise provided by this code, the [The]
definition of "person" assigned by Section 311.005, Government
Code, does not apply to any provision in this code.
SECTION 3. Section 122.001(1), Estates Code, is amended to
read as follows:
(1) "Beneficiary" includes a person who would have
been entitled, if the person had not made a disclaimer, to receive
property as a result of the death of another person:
(A) by inheritance;
(B) under a will;
(C) by an agreement between spouses for community
property with a right of survivorship;
(D) by a joint tenancy with a right of
survivorship;
(E) by a survivorship agreement, account, or
interest in which the interest of the decedent passes to a surviving
beneficiary;
(F) by an insurance, annuity, endowment,
employment, deferred compensation, or other contract or
arrangement; [or]
(G) under a pension, profit sharing, thrift,
stock bonus, life insurance, survivor income, incentive, or other
plan or program providing retirement, welfare, or fringe benefits
with respect to an employee or a self-employed individual; or
(H) by a transfer on death deed.
SECTION 4. This Act takes effect September 1, 2015.