At Lovelace Law, we often run into scenarios where a married couple, family members, or even friends and business partners want to ensure that the property that they own together — specifically real property or real estate — passes in whole to the survivor of the first of them to pass away. Simply put, if two people own real property together, each wants the other to receive their interest when they pass away in order to keep the property solely between the two owners.
Often, clients want this transaction to happen as seamlessly as possible in order to avoid the need to go through the probate process to convey the property interest. In order to do this, it is important to understand what options are available to make this happen as well as the practical effects of these options.
Below, our survivorship agreements lawyers weigh in:
What does Texas law say?
The Texas Estates Code allows for joint owners of both community property (property acquired during a marriage, generally) and separate property (all non-community property) to enter into a survivorship agreement, wherein all parties agree that upon the death of a joint owner, the deceased joint owner’s interest in the property described in the agreement passes to the surviving joint owner(s).
In fact, the Texas Estates Code even goes so far as to give examples of the language needed to ensure the validity of such an agreement, and, for survivorship agreements involving community property, specifically states that no other court action is needed so long as the survivorship agreement satisfies the easy form requirements laid out in the code.
Survivorship agreements in Texas aren’t always so simple.
As simple as the above law seems to make these agreements, unfortunately, title companies in Texas are often hesitant to accept or insure property with these agreements.
Whether it’s the fact that these agreements aren’t official court documents, or because the agreement isn’t as formal as a deed, title companies are not comfortable relying on these survivorship agreements to transfer interest in property.
Despite the clear intent in the language of the law, most title companies require that these survivorship agreements be validated through the court, which negates any efforts that were made to avoid court involvement by executing the agreement in the first place.
At that point, it would have been cheaper to have the property interest conveyed through probate.
Are survivorship agreements in Texas worth the effort?
With title companies wary of these survivorship agreements, even in the face of clear statutory intentions, how can they be effectively and practically be used? In short, they may not be able to. Considering the potential title company issues, these agreements — at least on their own — may not be enough to ensure that the interest is passed the way that clients want.
In order to account for this reality, common workarounds include adding additional layers of non-probate transfer tools to act as a backup to the survivorship agreement, such as:
- Statutory Transfer on Death Deeds, or
- Enhanced Life Estate Deeds
These offer a belt-and-suspenders approach to making sure that the transfer happens as intended. After all, even if a few more documents are needed, it is likely still cheaper than conveying the interest through the probate process.
Need a Survivorship Agreement Lawyer to Safeguard Your Estate?
If you are looking to make sure that your interest and assets are transferred as easily and efficiently as possible, or if you have questions about any other estate planning or probate needs, the survivorship agreements lawyers at Lovelace Law would be happy to meet with you. We have experience in all areas of estate planning, including survivorship agreements, and can make sure that even with the nuances of title companies, your estate meets you and your family’s needs.
Contact us today. With law practice locations in Fort Worth or Burleson, we offer convenient access for those living in west Dallas-Fort Worth.
