The Special Provisions Involved with Six Types of Texas Property Deeds

While most deeds are documents used to transfer title to property to new owners, they can also be used to accomplish other goals, depending on their precise wording. Of course, the deed is not the actual title document itself.

What follows is a closer look at the types of special provisions included in six types of Texas property deeds. They include the general warranty deed, the special warranty deed, the deed without warranties, the quitclaim deed, the Lady Bird deed, and the deed in lieu of foreclosure.

What is unique about the provisions set forth in a Texas general warranty deed?

This type of deed is viewed as the strongest form of a deed that can be used in Texas. It transfers title to property with both express and implied warranties. An express warranty provides greater protection to grantees and imposes a greater level of liability on the grantor. In contrast, implied warranties are legally understood to be present in nearly all deeds governed by the Texas Property Code whenever the words “convey” or “grant” are used in the document.

Many general warranty deeds use the two words “grant and convey” together when specifically stating what rights are being transferred. These types of deeds are almost always used in Texas residential transactions. Always be sure to have your Houston real estate or business law attorney draft (review or interpret) your deeds for you to be sure all necessary limitations or reservations are included to fully protect your rights. This type of deed provides the lengthiest chain of title.

The special warranty deed in Texas can also be quite useful

Unlike the general warranty deed, this one only offers a warranted title running back to the time

when the current grantor became the title owner. Like the general warranty deed, it sets forth both express and implied warranties.

While this type of deed is commonly used in many commercial transactions, some prospective property owners are rightfully concerned that it will not protect them if they later learn of title irregularities that occurred prior to the current grantor’s legal receipt of title to the property. Legal clients should always ask their lawyers which types of deeds offer them the greatest protection from future legal claims and lawsuits.

A deed without warranties can be as risky as the name implies

This type of deed is often preferred when properties are being purchased by way of a tax sale – or when inheritance properties are known to have definite title issues. To protect themselves in these situations, grantors may be unwilling to provide a stronger form of warranty. This type of deed will usually state in a very direct manner that all the warranties that might normally be considered available under Texas common law – are expressly excluded.

Always be doubly sure to ask your attorney if you should ever accept this type of deed for any tract of land or other property that’s very important to you since various title irregularities may become obvious at a later date and possibly invalidate your full ownership rights.

Should you ever seriously consider using a Texas quitclaim deed?

Since these types of deeds usually do not convey any warranties, it is often too risky to accept conveyance of title to property using a quitclaim deed. In other words, this type of deed does not state in any express or implied manner that the title that the grantor is transferring to you is valid. All this deed does is transfer whatever unknown type of title the grantor has to the new owner. It is always preferable to ask your lawyer to draft a deed for you that uses express wording to state that the grantor is conveying the property in an unconditional manner with warranties.

Another basic problem that can occur with a quitclaim deed is that some title companies are unwilling to insure this type of title. For this reason, you should almost never accept any transfer of title in the form of a Texas quitclaim deed.

The Texas Lady Bird Deed

This deed is also known as a life estate deed that allows a grantor to transfer title of property to a grantee with what is known as an “enhanced life estate” being retained by the grantor. An enhanced life estate allows the holder of it to still sell or mortgage the property without getting the permission of those named as future grantees in the deed. Someone who has only reserved a basic life estate to themselves would have to obtain permission from the various future grantees before trying to sell or mortgage the property.

A deed in lieu of foreclosure

While your lawyer can draft this type of deed for you, they are not used very often when purchase-money mortgages are involved. This is because Texas has “non-judicial” foreclosure proceedings that may be preferable. Be sure to discuss how much equity you hold in the property since you may want to do what is called a “short sale.”

If you are either wanting to transfer title to property in Texas or simply need help interpreting the language in a deed that’s recently been presented to you for your review, please feel free to call one of our Murray Lobb attorneys. We can either draft the right type of deed you need with all the proper legal language — or help you interpret the wording of any deed you have just received.

The Four Texas Probate Choices When Someone Dies Without A Will

Since more than half of all Americans never create a Will or estate plan, there is a strong chance you may one day have to help manage this type of estate. Fortunately, Texas provides four viable approaches for handling such matters — each with its own separate requirements and possible disadvantages. They are described below to make it easier for you to discuss your options with your lawyer.

Two approaches to handling an estate after someone died without a Will involve simply filing affidavits. The other two options include having a probate court help determine the official heirs of the person who died – or the formal filing (or request) for either a dependent or independent administration of the estate.

The four ways you can probate a Texas estate when there was no Will or estate plan

I. You might be able to file a Small Estate Affidavit.

   Requirements for taking this approach – if the estate qualifies for it

  • The estate’s assets, minus the homestead and exempt property, must have a total value of $75,000 or less.
  • This affidavit can only be used to transfer title to a house that qualifies as a homestead. If other pieces of real estate are involved that require transfer, then this type of probate affidavit cannot be used.

Potential disadvantages of filing a small estate affidavit

  • At least two witnesses and all distributees of the estate must sign this affidavit. Since each person who signs the affidavit can later be held financially liable for all future transfers or payments made relying upon it, potential witnesses (and other signatories) are often unwilling to assume such a large degree of financial responsibility.
  • This approach cannot be used if the estate has any debts requiring payment. Since a court does not name a personal representative to handle all the estate’s assets and debts, there is no one eligible to handle the payment of debts.

II.  You might be able to file an Affidavit of Heirship    

     Requirements for taking this approach

     While it is not a strict requirement, this option is usually chosen when the only assets of the deceased that require title transfers are pieces of real estate.

     Drawbacks to using an Affidavit of Heirship?

  • Although some financial institutions will allow the transfer of title to other types of (non-real estate) assets under this type of affidavit, that final decision can only be made by that outside entity.
  • No personal representative is appointed in this type of proceeding. Therefore, if the estate involved has debts, no one is authorized to collect all the assets together and then pay the debts.
  • All title companies do not accept Affidavits of Heirship. Furthermore, some of these companies may only accept this type of affidavit after two (or more) years have passed since it was signed.

The main or “qualified” advantage of this approach is that it costs less than the following two ways of managing an estate after someone dies without a Will in Texas.

III.  You can ask a probate court to make a formal Determination of Heirship    

      This option is designed to firmly establish the distribution of assets to all proper or legal heirs, under the Texas probate code’s intestacy provisions.

      Advantages to taking this more costly approach

  • This choice greatly reduces the chances of fraud that are more likely to occur under the first two options named above since they do not involve any court hearings.
  • An attorney ad litem is appointed by the court. This person has the duty to investigate the decedent’s family history before submitting a formal report to the court (prior to its formal ruling on all the evidence presented).

      Disadvantages to this approach to handling an estate when No Will was found

  • This process is more time-consuming. However, it provides third parties with verifiable evidence that the court had legal grounds for approving the transfer of title during its probate proceedings.
  • It is more costly since at least one court hearing will be scheduled.

IV.  You can request either a Dependent or Independent Administration of the estate

       This approach is chosen when the parties involved want the probate court to appoint a formal administrator of the estate. (The only real difference between a “dependent” or “independent” administration of an estate is the degree of court involvement. The dependent type normally requires more court involvement or direction).

    

      Advantages of dependent or independent administration of an estate

  • The court will appoint a personal representative and provide that person with formal letters of administration, granting that person the right to handle all negotiations with third parties regarding the estate’s assets.
  • Third parties are more likely to quickly provide all required documentation and data requested by the appointed representative, helping to streamline the probate process.

     Two possible drawbacks to this approach

  • It is more expensive. While this is usually the most costly way to handle the estate of someone who has died without a Will, it can prove quite wise in the long run –since all matters will be carefully monitored by the court (even when handled by an “independent” administrator). This lowers the chances of a future need to return to court due to challenges based on fraud.
  • It can prove to be more time-consuming. However, many people who can afford this approach consider it a very valid trade-off compared to only using affidavits that may not be acceptable to all parties.

Please don’t hesitate to contact one of our Murray Lobb attorneys when you need help managing the estate of someone else. Our firm has extensive probate and estate planning experience that allows us to provide you with fully trustworthy legal advice.