How a TOD deed works.
A transfer-on-death (TOD) deed names one or more beneficiaries who receive your real estate when you die. Until then nothing changes: you still own the property, can live in it, sell it, or mortgage it, and can revoke or change the deed at any time. Beneficiaries don't sign it and have no rights until your death — and they take the property subject to any mortgage or liens.
In both Texas and New Mexico, a TOD deed has no effect unless it's signed before a notary and recorded in the county where the property is located before the owner dies. A signed deed sitting in a drawer won't work — and it can't be fixed after the fact.
Texas vs. New Mexico.
| Texas | New Mexico | |
|---|---|---|
| Law | Texas Real Property Transfer on Death Act (Tex. Est. Code ch. 114) | Uniform Real Property Transfer on Death Act (NMSA §§ 45-6-401 to -417) |
| Signing & recording | Signed and notarized like a regular deed, and recorded in the county's deed records before death (§ 114.055) | Signed, notarized, and recorded with the county clerk before death |
| Changing or revoking | By recording a new TOD deed or a revocation before death (§ 114.057) — not by will | By recording a new TOD deed, a revocation, or a deed transferring the property — not by will |
| Debts | If the probate estate can't cover its debts, property passed by TOD deed can be reached (§ 114.104) | Beneficiaries take the property subject to mortgages and liens |
Texas option: the Lady Bird deed.
Texas also recognizes the enhanced life estate deed, often called a Lady Bird deed. Like a TOD deed, it passes your home outside probate while you keep control during your lifetime, including the right to sell. It isn't a statutory form, so the drafting matters. A Texas TOD deed also can't be signed by an agent under a power of attorney, which can make a Lady Bird deed the better tool when someone else has to sign.
Lady Bird deeds come up often in Medicaid planning, and TOD deeds and Lady Bird deeds aren't treated the same way for Texas Medicaid estate recovery. If long-term care is a possibility, we'll review that with you before choosing.
When a TOD deed is a good fit.
- Your home or land is your main asset and you want to keep it out of probate
- You don't need a full trust
- You want a simple way to pass property to children or a partner
- You own property in a state other than the one you live in
Watch-outs.
- Married owners: both states are community property states, so plan with both spouses' interests in mind — usually both should sign.
- Joint tenants: in New Mexico, a surviving joint tenant's rights come before a TOD beneficiary's.
- Beneficiaries on benefits: leaving a home directly to someone on SSI or Medicaid can cost them their benefits — consider a special needs trust.
- Keep it current: a TOD deed isn't revoked by your will, so a later will doesn't fix an outdated deed.
TOD deed fees are quoted after a consultation; county recording fees are separate.
Common questions.
Do I still own my home after signing a TOD deed?+
What happens if I sign it but don't record it?+
Can my will override a TOD deed?+
Does a TOD deed protect my home from creditors?+
What's the difference between a TOD deed and a Lady Bird deed?+
Texas estate planning services are provided by Jeff Barnett, Of Counsel (Texas Practice), of Barnett & Leuty, PC, Austin, Texas, licensed in Texas. New Mexico estate planning services are provided by Shawn Barnett, Managing Attorney, licensed in New Mexico. This page provides general information, not legal advice; reading it does not create an attorney-client relationship.