New Law Allows Mobile Homes to Pass Outside of Probate

A new law in Texas allows owners of certain mobile (manufactured) homes to designate a beneficiary to receive the mobile home upon the owner’s death. The law is effective September 1, 2025.

First, some background: people own many different types of assets—house, mineral interests, automobiles, bank accounts, life insurance, retirement accounts, brokerage accounts, cryptocurrency, and the list goes on. Those with retirement accounts and life insurance most likely have signed a beneficiary designation, which dictates who or what entity will receive the account or benefit upon their death. For example, most married individuals name their spouse as the beneficiary of their retirement accounts.

Assets with a written beneficiary designation in effect as of the owner’s death will pass to the named beneficiary or beneficiaries on the beneficiary designation form. Provided the named beneficiaries are living (individuals) or in existence (trusts or entities), the assets will not pass under the deceased owner’s Will, if they have one, or under the Texas heirship laws if they don’t have a Will.

Many mobile home owners own the mobile home but do not own the land upon which it sits. Therefore, the default is that mobile homes in Texas are characterized as personal property, similar to an automobile. When the owner also owns the land, the owner usually elects to have the mobile home treated as part of the real estate, which enables the mobile home to pass along with the land to the beneficiary under a transfer on death deed, bypassing probate. This election is made on a document submitted to the Manufactured Housing Division of the Texas Department of Housing and Community Affairs (TDHCA).

The new law is beneficial to people whose mobile homes are considered personal property because they now have a way to designate who will receive the mobile home at their death, bypassing probate. Similar to a transfer on death deed for real estate, the designation has no effect during the owner’s life—the named beneficiary has no right to the mobile home until the owner’s death. The owner can revoke or change the beneficiary designation during their life.

To designate a beneficiary, the owner must submit the new form to the TDHCA. Joint owners must both sign the beneficiary designation form, and it does not take effect until after the last surviving owner’s death. Within 365 days of the owner’s death, the beneficiary or beneficiaries must apply to TDHCA for ownership. If the application is not made in time, the beneficiary designation is void.

In some situations and depending on one’s estate planning goals, a revocable living trust may be preferred to a Will. Keep in mind that with particular types of assets, such as a house, car, or mobile home, naming the trust as the beneficiary is optimal because it allows the person to plan for contingencies, not only for what happens when a named beneficiary passes away before they do, but for incapacitated or minor beneficiaries.

Since 2018, Texans have been able to designate a beneficiary for a motor vehicle, using Texas DMV Form VTR-121.

Having many clients in the position of applying for nursing home Medicaid with a need to protect modest estates from Medicaid Estate Recovery, members of the Texas Chapter of the National Academy of Elder Law Attorneys understood the benefit of such planning, and were responsible for initiating the effect to change the law to offer these options.

For articles related to the pros and cons of having a Will or a Trust, coordinating non-probate assets, the probate process, and Medicaid Estate Recovery, see https://www.wrightabshire.com/publications/houston-chronicles/.

You may visit our website at www.wrightabshire.com. Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general information.