5.02 Elder Law


In General

Title companies and elders and their families have differing needs which often are conflicting.  Title companies look for confirmable facts and certainty while elders need flexibility and the ability to make changes as their circumstances and state and federal laws change.  Among the issues where these conflicts arise are: intrafamily conveyances, federal laws placing income and asset limitations on individuals receiving benefits, powers of attorney, transfer on death deeds (and related issues such as lady bird deeds and survivorship deeds and estates).  While these matters are frequently addressed in other sections of virtual underwriter, the commonality of these issues is that they affect elders.  Generally speaking an elder is a person over 65 years of age, many times having also been judicially declared to be incapacitated physically or mental with a guardian having been appointed.  


Powers of Attorney

See also Texas Bulletin TX2013001 regarding Elder Law Planning.

Stewart Title Guaranty has expressed its preference for the Statutory Durable Power of Attorney form to be used in most situations. In an Elder care situation, we greatly prefer that language be included in the document that specifically recognizes the need for Elder care and authorizes certain intra-family transactions. Such language should be substantially in the following format:

1. A recognition that the Maker of the POA may need Elder care in the future; 

a. Such as Medicaid long-term nursing home care benefits or Community Based Alternative benefits or any related need-based governmental benefit; 

2. Grant the Agent the specific power to: 

a. Gift and transfer any assets without limitation to the Grantor's spouse to be characterized as the sole and separate property of such spouse. 

3. Provide that evidence of the agent's power shall be: 

a. A copy of the completed and filed application form necessary to apply for a need-based government benefit.

4. Provide assurance that filing of such application form combined with the transfer of property to the Grantor's spouse without necessity of any order of action shall be conclusive evidence of the change in character of property as such spouse's sole and separate property.

Powers of Attorney in Home Equity Loan Situations

The Texas Supreme Court handed down a decision on June 21, 2013, with far reaching implications. The case concerned 3 main issues but only powers of attorney rise to immediate concern for the title industry.




If you are presented with an already executed power of attorney with an execution date of prior to June 21, 2013, no home equity loan may be insured in reliance on it. If you are presented with an executed power of attorney dated after June 23, 2013, you must obtain a certification from both the lender and the parties to the Power of Attorney that it was executed at the Lenders office before it can be used to insure a home equity loan. If the POA is executed in your office after June 23, 2013, it may be used.

In pertinent part the decision reads as follows:

Section 50(a)(6)(N) provides that a loan may be “closed only at the office of the lender, an attorney at law, or a title company”. The Commissions acknowledge, and the Homeowners agree, that “[t]his provision was intended to prohibit the coercive closing of an equity loan at the home of the owner. Nevertheless, the Commissions’ interpretations allow a borrower to mail the required signed consent to the lender and to close through an attorney-in-fact. Both these interpretations permit coercion in obtaining the required consent and a power of attorney at the borrower’s home, allowing the final closing to occur later at one of the prescribed locations, thereby defeating the purpose of the provision.

Closing a loan is a process. It would clearly be unreasonable to interpret Section 50(a)(6)(N) to allow all the loan papers to be signed at the borrower’s house and then taken to the lender’s office, where funding was finally authorized. Closing is not merely the final action, and in this context, to afford the intended protection, it must include the initial action. Executing the required consent or a power of attorney are part of the closing process and must occur only at one of the locations allowed by the constitutional provision. (emphasis added)

Whether so stringent a restriction is good policy is not an issue for the Commissions or this Court to consider. That the issue should arise counsels against constitutionalizing minutiae, placing them beyond regulatory or legislative adjustment. But the purpose of the provision is indisputable, and the Commissions’ interpretations in derogation of that purpose can be justified only by reading “closing” to mean some aspect of the closing process. The court of appeals concluded that the use of the mail to transmit documents and of a power of attorney to facilitate execution are so commonplace that had the framers and ratifiers of Section 50 intended to preclude these practices, they would have said so with more specificity.

The court pointed to Section 50(a)(6)(Q)(iv), which prohibits using a borrower’s power of attorney to facilitate obtaining a judgment against a debtor, should he default. But it is precisely the common use of the mail and powers of attorney in closing transactions that gives rise to the danger of coercion Section 50(a)(6)(N) was intended to prevent. 303 S.W .3d at 417 (citations omitted).

We conclude that the Commissions’ interpretations of Section 50(a)(6)(N) contradict the purpose and text of the provision and are therefore invalid.


See also Texas Bulletin TX2013004 regarding Powers of Attorney in HEL Transactions.


Lady Bird Deeds

Stewart Title Guaranty Company has serious concerns when one spouse transfers title to the other for no apparent reason. Accordingly, so-called Lady Bird or deeds on death will likely be rejected unless they contain language that explains the situation as one involving Elder care. The State Bar of Texas form book contains suggested language to accomplish the goals of the parties while providing explanatory language. Such language would provide substantially as follows (note the following suggestion contains enhanced Elder Law language):

For Grantor and Grantor’s assigns, a reservation of the full possession, benefit, and use of the Property for the remainder of the life of Grantor, as a life estate.

Grantor further retains complete power, without the joinder of any person, to mortgage, sell, and convey the Property, in whole or in part, and to spend any proceeds; to exchange it for other property; to lease the surface and subsurface of the Property; to execute and deliver oil, gas, and other mineral leases for any term of years and for a term based on the continuing production of oil, gas, or other minerals from the Property, ending either before or after Grantors death; to grant any interest in the Property, by gift, sale or otherwise, so as to terminate the interests of Grantee, as Grantor in Grantor’s sole discretion shall decide; and to invest and reinvest all proceeds from the sale or other disposition of the Property; to possess and consume all proceeds from the sale or other disposition of the property to the exclusion of  Grantee. This life estate carries with it the right to possess and consume all bonuses, delay rentals, royalties, and other benefits payable on any mortgage, sale, or conveyance under oil, gas, and other mineral leases covering the Property at the inception of this life estate without any duty to the remainderman and without liability for waste.

Grantor further reserves the right to cancel this deed by further conveyance, even to Grantor, which may destroy any and all rights which Grantee may possess under this deed.

Grantee shall hold a remainder interest in the Property and upon the death of Grantor, if the Property has not been previously disposed of prior to Grantor’s death, all right, title and interest to the Property remaining shall fully vest in Grantee, subject to such liens and encumbrances existing at that time.

For more detailed analysis of Elder law issues, the reader is referred to a copyrighted paper on the subject presented to the 2012 Texas Land Title Institute by:

Kiesling, Porter, Kiesling & Free, P.C.
Board Certified – Residential Real Estate
348 East San Antonio Street
New Braunfels, Texas 78130


Schoenbaum, Curphy & Scanlan, P.C.
Certified as an Elder Law Attorney,
as recognized by the Texas Board of Legal Specialization
112 East Pecan Street, Suite 3000
San Antonio, Texas 78205

See also Texas Bulletin TX2013001 regarding Elder Law Planning. 


Transfer on Death Deeds

Effective September 1, 2015, the Texas legislature has enacted the Texas Transfer on Death Deed Act as presented in SB 462. The intent of the Act is to create a statutory vehicle for transferring real property without the expense of a probate proceeding. Through a recorded Transfer on Death Deed (“TODD”), a real property owner can designate a beneficiary or beneficiaries to receive the property upon the owner’s death automatically. The beneficiary has no interest in the real property during the owner’s lifetime and, therefore, the owner retains full authority to transfer or encumber the property until his/her death. 

How does it work?

  • Using a TODD, owners can transfer their interest in real property to one or more beneficiaries to be effective at owner’s death. The TODD must be recorded in the deed records in the county clerk’s office of the county where the real property is located.
  • A TODD is always revocable during the life of the transferor, but cannot be revoked through a will. A will provision also cannot replace a TODD beneficiary designation. 
  • A TODD transfers real property without covenants of warranty of title even if the deed contains a contrary provision.
  • It cannot be created through use of a power of attorney. 
  • Creditors of the grantor have two (2) years to bring a claim against the estate per Estates Code Sec. 114.106(e).
  • The Act applies to TODDs executed and acknowledged on or after September 1, 2015 by a transferor who dies on or after September 1, 2015. The Act does not affect other methods of transferring real property.

What must it contain?

  • The essential elements and formalities of a recordable deed
  • State that the transfer of an interest in real property to the designated beneficiary is to occur at the transferor’s death; and
  • Be recorded before the transferor’s death in the deed records in the county clerk’s office of the county where the real property is located.
  • No notice, delivery, acceptance, or consideration is required.

How is the TODD different than a Lady Bird Deed?

  • In a Lady Bird Deed, the Grantor reserves a life estate (full possession, benefit, and use of the property for the remainder of the life of Grantor). The Grantee holds a remainder interest in the Property until Grantor’s death. Therefore, two distinct interests are held by both parties.
  • In a TODD, the Grantor retains all interest in the property during Grantor’s lifetime and the designated beneficiary has no interest until Grantor’s death. The TODD functions much like a pay-on-death account. 


Because the TODD does not carry a warranty, you cannot rely on a starter if the owner is deceased and the TODD designates a beneficiary outside of a family member. You must conduct a standard thirty-five (35) year search or a search starting from the first deed older than thirty-five (35) years (follow Bulletin TX0000065).  

If the owner is deceased and the TODD designates a family member or members as beneficiary(ies), conduct your thirty-five (35) year search and require the subsequent deed from the beneficiary be a General Warranty Deed or Special Warranty Deed. If you are asked to accept another deed form, contact a Texas underwriter for approval.

Stewart will accept a TODD as a vesting instrument so long as it substantially conforms to the statutory form as provided in Estates Code Sec. 114.151. If you receive a non-statutory form that appears to not contain the elements required above, seek Texas underwriter approval.

If the real property is non-homestead, you must wait two (2) years after the transferor’s death to allow creditors to file a claim against the transferor’s estate. You must also examine a balance sheet of the estate and obtain an indemnity from the beneficiaries as required in P-11b. (9). Please note that the beneficiaries must prove their solvency to the Stewart underwriter’s sole satisfaction.

Revocation of a TODD and the Effect of Will or Marriage Dissolution

A will may not revoke or supersede a TODD.

Revocation by one transferor in a TODD made by more than one transferor, does not affect the deed as to the interest of the one not revoking.

TODD made by joint owners with right of survivorship is revoked only if it is revoked by all of the living joint owners.

It should go without saying that a deceased transferor cannot revoke a TODD.

Effective revocations:

  • Subsequent TODD that revokes the preceding TODD or part of the TODD expressly or by inconsistency;
  • Instrument of revocation that expressly revokes the TODD or part of the TODD (see the statutory Cancellation of Transfer on Death Deed form provided in Estates Code Sec. 114.152);
  • Final judgment of a court dissolving marriage operates to revoke the TODD as to the designated beneficiary if recorded before the transferor’s death in the deed records.

Must be:

  1. Acknowledged by the transferor after the acknowledgment of the deed being revoked; and
  2. Recorded before the transferor’s death in the deed records in the county clerk’s office of the county where the deed being revoked is recorded.


Stewart will accept a Cancellation of Transfer on Death Deed as a valid revocation so long as it substantially conforms to the statutory form provided in Estates Code Sec. 114.152 and has been acknowledged by the transferor after the acknowledgement of the TODD being revoked. The Cancellation must also be recorded before the transferor’s death in the deed records in the county clerk’s office of the county where the deed being revoked is recorded. Stewart will not accept a revocation of a TODD made through a power of attorney. 

If the revocation is by inconsistency, please consult a Texas underwriter. 

See also Texas Bulletins TX2015003, TX2017007, TX2019009 regarding Transfer on Death Deeds.


Medicaid Issues

Definition: In this section, an Elder is defined as a person 65 years or older or who has been judicially declared incapacitated physically so as to require living in a residential facility or incapacitated mentally so as to be incapable of handling their affairs and a guardian of the Elder’s estate has been appointed by a court of competent jurisdiction. Other situations such as age variations or housing accommodations may apply which will require individual approval by a Texas underwriter.

Various federal programs provide aid in the situation described above (and others) under rather strict limitations; especially on the assets of the Elder receiving benefits. Information about the various Medicaid programs can be obtained from www.dads.state.tx.us. Each program has a separate Handbook. Medicaid Assistance Program and Medicaid Assistance waiver programs are governmental programs that provide many benefits including medical care, housing, and rehabilitation, as well as durable goods for those persons who meet certain physical and financial guidelines. When an individual has few resources (assets), a small monthly income and a medical need, the individual may be eligible for a specific Medicaid program. The most commonly accessed benefit is the Long Term Care Medicaid nursing home benefit.

One reason that title companies and Elders and their families come into conflict is the fact that Federal law places income and asset limitations on those receiving benefits. For example, all non-exempt resources of both spouses are counted toward the resource limitation regardless whether the property is community or separate. One-half of the couple's resources will be set aside for the well spouse (referred to as the “community spouse”) with a minimum set aside amount of $22,728 and a maximum of $113,640 (for 2012). The institutionalized spouse can only keep $2,000 in countable assets to meet asset eligibility requirements. As a result of the $2,000 asset limit, the institutionalized spouse must transfer any countable assets out of his/her name to the community spouse. Failure to transfer assets from the institutionalized spouse to the community spouse will result in disqualification for Nursing Home Medicaid benefits.

See also Texas Bulletin TX2013001 regarding Elder Law Planning.