Closing on a home is one of the biggest financial moments of your life. It is also one of the best times to look at your estate plan. Your largest asset now has a title, a mortgage and a future. This guide walks through what to review.
This is general information, not legal advice for your situation.
Why a new home is a planning trigger
Your home likely becomes the center of your net worth. How it is titled decides what happens if you die or cannot manage your affairs. Without a plan, your family may face probate court, delays and decisions you never intended.
Many North Texas buyers are also starting families or growing them. A new home often arrives alongside new children, a new marriage or a new business. Each change is a reason to revisit your documents.
Homestead basics
Texas offers a homestead exemption that can lower the school district property taxes on your primary residence. It is not automatic. You generally apply with your county appraisal district, such as Collin or Denton, and the deadline is generally April 30 of the tax year. If you bought during the year, the timing for your first exemption and any late-filing options can differ, so confirm current rules and forms with your appraisal district.
Texas also gives homestead property strong legal protections. In general terms, creditors cannot force the sale of a homestead for most ordinary debts, and a surviving spouse has the right to keep living there. Exceptions exist, such as mortgage and tax liens. The homestead exemption for taxes and homestead protection under the law are related but separate ideas.
How title affects what happens
The deed that you signed at closing matters. Married owners often hold title together, and the home is often community property. Single owners hold it alone. Co-owners may hold it with or without survivorship rights.
If you die without a plan, title and Texas intestacy rules decide who inherits. That may not match your wishes, particularly in a blended family. Our guide at blended family guide explains how.
Transfer on death deed or living trust?
Two tools commonly come up for a home. Both avoid probate for the property. They work differently.
Transfer on death deed (Texas Estates Code Chapter 114). You sign and record a deed naming who receives the home at your death. You keep ownership, and you can sell or revoke while living.
Pros:
- Simple and often less costly to set up than a trust.
- You keep control and the homestead and tax benefits during life.
- Revocable at any time before death.
Cons:
- It must be properly signed and recorded in the county records before your death to work.
- It covers only that one property. It does not help if you become incapacitated.
- A will cannot revoke it, so later changes require a recorded document.
- Beneficiaries take the home subject to any mortgage or liens.
- It offers little control over how or when a beneficiary receives the property.
Living trust. You transfer the home into a trust you control. You name a successor trustee to manage or distribute it.
Pros:
- Works if you become incapacitated, because your successor trustee can step in.
- Can hold the home, investments and accounts in one plan.
- Lets you set terms, such as staged distributions or protection for a spouse or minor child.
Cons:
- Requires drafting and a deed to fund the trust. An unfunded trust does not do its job.
- Involves more upfront work and attention to funding.
- May require review of your mortgage and title insurance. We coordinate with your lender and title company as needed.
Neither is right for everyone. The better choice depends on your family, your other assets and your goals. For a fuller comparison, see will vs. living trust guide.
Guardians and powers of attorney
If you have minor children, your will can name the guardian you want a court to consider. Without that choice, a judge decides.
You also need a durable financial power of attorney and a medical power of attorney. These name who can act for you if you cannot, whether for the mortgage, repairs or hospital decisions.
Your new homeowner estate plan checklist
- Check your deed. Confirm exactly how title is held and who is named.
- File for the homestead exemption. Apply with your county appraisal district for your primary residence.
- Name your guardians. If you have minor children, choose a guardian and a backup.
- Sign a will. Even with other tools, a will serves as a safety net.
- Decide between a transfer on death deed and a living trust. Match the tool to your family and goals.
- Sign powers of attorney. Choose agents for finances and medical decisions.
- Update beneficiary designations. Review life insurance, retirement accounts and bank accounts.
- Review homeowner and life insurance. Make sure coverage fits your mortgage and your family.
- Store documents safely. Tell your agents and family where to find them.
- Schedule a Legacy Check-in. Review your plan after major life changes.
How we help
We design strategy around your home and your family. Your first step is the Alers Legacy Strategy Session. Then we move through the Legacy Design Meeting, Precision Drafting, the Legacy Walkthrough and the Legacy Signing Ceremony. Plans are quoted as one fixed fee after the Legacy Design Meeting, with no hourly billing. See estate planning process page for each step.
We work with homeowners across growing North Texas, including Celina and Prosper. For an overview, see estate planning page.
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Book your Alers Legacy Strategy Session
Not sure where to start? Schedule a free 15-minute discovery call with our team.
FAQs
Do I need an estate plan right after buying a home in Texas?
It is a good time to start. Your home is likely your largest asset, and its title affects what happens if you die or cannot act for yourself.
Do I have to apply for the homestead exemption?
Generally, yes. You apply with your county appraisal district, and the deadline is generally April 30. New owners should confirm first-year timing with the district.
What is a transfer on death deed in Texas?
It is a recorded deed that names who receives your real property at your death, under Estates Code Chapter 114. You keep ownership and can revoke it while living.
Is a transfer on death deed better than a living trust?
Neither is better in every case. A deed is simpler but covers one property. A trust can handle incapacity and set terms, but needs funding.
Who raises my children if something happens to both of us?
A court decides and considers your wishes. You can name a guardian in your will so the court knows your choice.