Deed for Death: Texas Twist for Survivors

Texas real estate law can be pretty confusing, especially when it involves community property.  Read on for a cautionary, and all-too-common, tale.

Carol and David Smith, married for 25 years, moved to Texas and bought a house.   The title company attorney initially prepared the property deed identifying them as “Carol and David Smith, husband, and wife.”  David, being a shrewd man who knew a thing or two about real estate, insisted that the deed be changed to “Carol and David Smith, joint tenants.”  That way, he told everyone who would listen, when one of them died the survivor would own the house.

Shortly thereafter, while walking barefoot in her garden, Carol had an unfortunate encounter with a copperhead snake and suffered an untimely death.

Smug with his amateur estate planning, David didn’t bother to probate Carol’s will.   Instead, he continued to live in the house for the next 17 years.

When he finally got ready to sell the house, he had a nasty surprise.

It turns out that in Texas the interest of a decedent (Carol, in our example) does not automatically pass to the other joint owner.  Instead, the decedent’s interest passes by will or, if there is no will, by intestacy.

As a result, David did not automatically take title to the entire property merely because he was listed as a joint tenant.  He could not sell the house because he did not have clear title to it.

Interestingly, the outcome would have been the same had the deed been titled as “Carol and David Smith, husband, and wife.”  In Texas, a spouse does not automatically inherit real estate just because it, the deed, is titled in both of their names.

We can play this game all day long.  If Carol and David had been listed as “co-tenants” or “tenants with right of survivorship” it would not turn out any differently.

For a right of survivorship to exist between a married couple, it has to be contained in a separate written agreement that meets all of the requirements of the Texas Estates Code for a community property agreement.   That is counter-intuitive for most people coming to Texas from another state.  Shoot, it is counter-intuitive for most Texans, too.

So what does David do now?

Well, he cannot probate Carol’s will because more than 4 years have passed since her death.   To clear up the house title issue, David will have to go through an entire intestacy court proceeding and get a court order declaring that he owns the property.  Only then will he be able to sell it.

It would have been considerably more complicated if, in our hypothetical,  we had given Carol a few kids from a prior marriage.  Then David would not have inherited all of Carol’s share of the property.  He would, instead, have owned the property with his step-kids.

Oops.

The Carol-and-David story teaches us, once again, that common sense has no place in Texas community property law.

 

Virginia Hammerle is a licensed Texas attorney.  Her practice includes estate planning, litigation, guardianship, and probate law.  See hammerle.com for her blog and newsletter sign-up.  This column does not constitute legal advice.