One of the biggest legal myths in Texas is that jointly owned property automatically goes to the surviving co-owner upon one owner’s death. Once a joint owner (co-tenant) of property dies without a will, Texas intestacy law governs the distribution of the deceased owner’s interest in the property. One of the easiest ways for co-owners to ensure that property passes to the other upon one owner’s death is to execute a survivorship agreement.
Survivorship Agreement vs. JTROS Deeds
A common misconception is that survivorship rights to joint property must be defined through a Joint Tenancy with Right of Survivorship (JTROS) deed. In fact, creating a JTROS Deed is a risky endeavor, one best avoided if possible. A much easier and more convenient way to communicate survivorship agreements is defined in Texas Estates Code § 111.00, in effect since January 1, 2014:
“(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.”
According to this code, if the owners want to change the default stance, they can simply write and sign an agreement, known as a survivorship agreement, which expresses their preferences for dividing property.
The following is common language for survivorship agreements:
"Owners own the Property jointly and for valuable consideration agree with each other as follows:
1.If no severance occurs before the death of [either/any] Owner, then on the death of [either/any] Owner, the interest of the joint Owner who dies will survive to the surviving joint Owner[s].
2.Owners will after this date own the Property in the same manner as joint tenants with right of survivorship.
3.This agreement may be revoked, and the joint tenancy of Owners in the Property may be severed, only by a written instrument signed by all Owners.
4.This agreement is binding on Owners and Owners' respective heirs and successors."
Types of Survivorship Agreements
Survivorship Agreements may vary depending on the circumstances. For example, if a married couple wants their community property to go to the surviving spouse, § 112.051 of the Texas Estates Code authorizes a Community Property Survivorship Agreement.
A Non-Spousal Survivorship Agreement, which is separate from the community property agreement, is a written agreement that the property of a joint owner who dies survives to the surviving joint owner(s). Texas Estates Code § 111.001.
Spouses may also write a Partition and Exchange Agreement, which establishes separate property for each and allows spouses to designate a survivor other than the spouse for receipt of that separate property. A partition and exchange agreement may apply to all or only part of their community property. Texas Family Code Estates Code § 4.102.
Survivorship agreements clarify the parties’ preferences and provide important documentation for survivors, lenders, and title companies, but they can be confusing and/or difficult to interpret accurately. Working with a qualified real estate attorney will ensure that the owners’ desires are accurately reflected in the survivorship agreement, avoiding difficult probate issues in the process.
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