SB1940

Making or changing the designation: the owner submits an application for a new statement of ownership to the Texas Department of Housing and Community Affairs’ manufactured housing division. It must say the transfer occurs at death and include each beneficiary’s legal name. A new application can change or revoke the designation without beneficiary consent, subject to the joint-owner rules below. A designation, change or revocation not submitted before the relevant owner’s death is invalid. If an application designating a beneficiary is mailed, it must use certified or registered mail, return receipt requested; its postmark is treated as the submission date. Final law, Section 3; Department definition; Statement-of-ownership process.

Not a present gift or a will: the designation is a non-will transfer arrangement. It needs no payment, notice to or acceptance by beneficiaries during the owner’s lifetime. A will cannot revoke or supersede it, regardless of when the will was made. During life, the owner can still sell or encumber the home; the beneficiary acquires no present legal or equitable interest. The designation does not change creditors’ rights or, subject to applicable federal law, public-assistance eligibility during the owner’s life. This is not a promise that receiving the home after death has no benefit-eligibility consequences. Final law, new Sections 116.003 and 116.005.

Joint owners: all joint owners with right of survivorship must make the designation and agree to changes or revocation. The last surviving joint owner can change or revoke it alone. The home first belongs to surviving joint owners; the beneficiary designation takes effect at the last joint owner’s death. The chapter’s special definition of “joint owner” expressly excludes owners of community property, with or without survivorship rights; it should not be treated as a general rule overriding spouses’ property rights. Final law, new Sections 116.001(3), 116.004 and 116.006(b).

Survival and claiming the home: a designated beneficiary must survive the relevant owner by 120 hours. If any designated beneficiaries do so, the interest transfers to the surviving designated beneficiaries. If none do, the designations lapse and the referenced will-gift rules govern, including applicable substitute-gift rules for descendants; the law does not simply award the home to the first named beneficiary’s estate. To obtain the ownership transfer, the sole beneficiary—or all beneficiaries jointly—must submit the ownership application and satisfactory proof of death by the 365th day after the owner’s or last surviving joint owner’s death. The designation is void if those items are not submitted before day 366. Final law, new Section 116.006(a) and Section 1201.2135(c)–(c-1); Failed-gift rules; Substitute gifts to descendants; Class gifts.

Debts and disclaimers: the home passes subject to existing liens, contracts and other interests; lienholders retain lawful collection remedies. The act also imports the transfer-on-death creditor-claim procedures and potential liability when the estate cannot cover claims, administration expenses, estate taxes or protected family allowances. That procedure generally has a two-year filing limit, with the statutory exception for specified matured secured claims. A beneficiary may disclaim the interest under Property Code Chapter 240, and Section 122.001 is updated to include manufactured-home beneficiaries. This is not a debt-erasing transfer. Final law, new Sections 116.003(d), 116.006(c), 116.007 and Section 2; Secured-creditor procedures; Estate-claim and family-allowance liability; Disclaimer requirements.

Changes during passage: the Senate committee substitute expanded the introduced single-beneficiary option to multiple beneficiaries, required joint submission by multiple claimants, extended the introduced 180-day claim deadline to 365 days, added the express void-if-late provision and specified certified/registered mailing and the postmark rule. Those changes remained in the Senate-passed, House committee and final texts. No amendments are indexed. The final certified votes were 31–0 in the Senate and 138–0 in the House, with one House member present but not voting. The act authorizes agency rules and sets September 1, 2025 effectiveness. Introduced; Senate committee substitute; Senate-passed; House committee; Final law, Sections 3–4 and certification; Version index; Amendment index.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Owners of qualifying homes gain a way to arrange transfer at death without making that designation part of a will. Beneficiaries must meet survival and filing conditions and may inherit a home still burdened by debt. Personal-property classification matters: the existing Property Code treats a home as real property when the required ownership-record election and county recording have occurred. SB1940 does not transfer the underlying land merely by naming a home beneficiary. No particular family’s title, classification, claim or eligibility is determined here. Final law; Personal versus real property.

The March 25 introduced and April 10 substitute fiscal notes anticipate no significant state or local-government fiscal implication and assume state implementation costs can be absorbed with existing resources. They do not quantify a family’s filing fees, legal costs or savings from avoiding a will-based transfer. Actual forms, agency processing and individual transfers have not been verified in this review. Introduced fiscal note; Substitute fiscal note.