Texas law makes assumptions about how married couples and joint owners will hold title to real estate and creates default classification based on those assumptions. If the owners want to change these classifications, they may do so by written agreement. These agreements are signed by all owners to express each owner’s intent to hold title in a specific way. Common agreements include:
Agreements like these can assure third parties—like title companies—that the spouses agree about the characterization of the property and that each owner intends to hold title in a specific way.
Most real estate acquired by a married couple during the marriage is treated as community property. Spouses can use a Partition and Exchange Agreement convert community property to separate property of one spouse.
By default, community property does not include survivorship rights. On the death of one spouse, his or her interest in the property passes to his or her estate instead of directly to the surviving spouse.
Married couples can change this result using a Community Property Survivorship Agreement. The Community Property Survivorship Agreement must be in writing and signed by both spouses. It must also include special language to create the survivorship rights. Although the agreement may be created at any time, it is good practice to create it when the spouses acquire the real estate and to record it in the land records with the deed.
Our online deed preparation service can create deeds that vest title as community property with rights of survivorship. If you indicate in the interview that you want to take title as community property with right of survivorship, our software will create both the deed and the Community Property Survivorship Agreement, each of which contains the special language required to hold title as community property with right of survivorship.
By default, property owned by multiple owners does not include a right of survivorship. Co-owners may create a right of survivorship by agreeing to hold title as joint tenants with right of survivorship. Specifically, Section 111.001 of the Texas Estates Code provides:
RIGHT OF SURVIVORSHIP AGREEMENTS AUTHORIZED.
(a) Notwithstanding Section 101.002, two or more persons who hold an interest in property jointly may agree in writing that the interest of a joint owner who dies survives to the surviving joint owner or owners.
(b) An agreement described by Subsection (a) may not be inferred from the mere fact that property is held in joint ownership.
Under this provision, joint owners can hold title with rights of survivorship, as long as they “jointly … agree in writing to do so.”
Although this language seems straightforward, it is not always clear how to create the right of survivorship. The problem arises from the fact that Texas deeds are usually signed only by the transferring owners (grantors), not by the people receiving the property (grantees). Because the grantees do not sign the deed, it is unclear that they have “agreed in writing” to hold title with right of survivorship. Although case law hints that acceptance of a Texas deed that contains a right of survivorship may be enough to create the “agreement in writing” between the co-owners, that case law pre-dates the current version of the Texas statute. This ambiguity can be avoided by having a separate Survivorship Agreement signed by the grantees.
Our online deed preparation service takes a conservative approach to rights of survivorship. If you indicate that you want to create a Texas deed that creates a joint tenancy with right of survivorship, our software will automatically include a Survivorship Agreement to be signed and recorded with the Texas deed. This approach removes any ambiguity about whether the co-owners have agreed to hold the property with right of survivorship.
These agreements can be especially helpful in the scenarios described below.
By default, the married couple will own the property as community property without rights of survivorship. If the couple wants to hold title as community property with right of survivorship, the couple must sign—in addition to the deed—a Community Property Survivorship Agreement. The Community Property Survivorship Agreement should be recorded with the deed in the land records of the county where the property is located.
For married couples that want to hold title as community property with right of survivorship, our online deed preparation service creates both a deed and the Community Property Survivorship Agreement. We also provide step-by-step instructions for completing the property transfer.
Because the owners are unmarried, community property is not an issue. The owners may own the property either as tenants in common or as joint tenants with right of survivorship.
If the owners will hold title as tenants in common, the deed should use the phrase “as tenants in common” to designate the form of co-ownership as a tenancy in common. This phrase is enough to create a tenancy in common. On the death of one owner, the interest of the deceased owner will not pass to the surviving owners. Instead, under Section 101.002 of the Texas Estates Code, the interest of the deceased owner will pass through the deceased owner’s will or—if the deceased owner did not have a will—by intestacy to the deceased owner’s heirs. The surviving owner will continue to own his or her proportionate interest in the property.
If the owners will hold title as joint tenants with right of survivorship, the deed should specify that the property is being held as joint tenants with right of survivorship. The owners should also sign a Non-Spousal Survivorship Agreement, which should be recorded with the deed in the land records of the county where the property is located.
Our online deed preparation service walks you through these decisions and chooses the correct language and documents based on your choices.
This scenario is similar to Scenario 2. Because each owner will hold title as separate property, the community property rules do not apply. The owners may hold title either as tenants in common or as joint tenants with right of survivorship.
If the new owners will hold title as tenants in common, the phrase “as tenants in common” or something similar should be added to the deed. Nothing more is required. If the new owners will hold title as joint tenants with right of survivorship, the joint owners should sign a Non-Spousal Survivorship Agreement and record it with the deed.
To avoid title issues, it is often recommended that the married party obtain written evidence from his or her spouse that the property is the owner’s separate property. A Marital Property Agreement that identifies the property, states the basis for characterizing the property as separate property, and is signed by both spouses and recorded with the deed. Although not strictly required, the Marital Property Agreement can prevent future title issues by assuring third parties—like title companies—that both spouses agree that the property is not community property.
Our online deed preparation service can create a Marital Property Agreement along with the deed.
This creates a scenario where a person will own property as community property, but without that person’s spouse also being included on the deed. In this situation, creating a joint tenancy with right of survivorship is difficult (perhaps impossible). There is simply no well-accepted way to create a survivorship arrangement that takes into account both the community property interest held by the unnamed spouse (who is not a party to the transaction) and all of the current owners of the property.
This scenario is similar to Scenario 4, but with an important difference: Both spouses are parties to the deed. In this scenario, both tenancy in common and joint tenancy with right of survivorship are available, as long as the spouses first partition their community property interest and convert it to separate property.
To make this work, the spouses must execute a Partition and Exchange Agreement that vests each spouse with an interest in the property as a separate property. The transaction would be treated as though it were between unrelated parties.
The owners could take title as tenants in common by using the phrase “as tenants in common” or something similar on the deed. Each party—including each spouse—would own an equal interest in the property.
Alternatively, the owners could take title as joint tenants with right of survivorship by including appropriate language in the deed and signing a Survivorship Agreement and recording it with the deed in the land records of the county where the property is located.
Our online deed preparation service gives you the options you need to structure mixed forms of ownership. It provides a guided interview to collect the information, then creates the language and documents that correspond with your choices.