Relating to a beneficiary designation that transfers a motor vehicle to one or more beneficiaries at the owner's death.

89(R) HB 5137 - Engrossed version - Bill Text

89R16197 EAS-D

By: Wilson

H.B. No. 5137

A BILL TO BE ENTITLED

AN ACT

relating to a beneficiary designation that transfers a motor

vehicle to one or more beneficiaries at the owner's death.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 115.002(a) and (b), Estates Code, are

amended to read as follows:

(a) An owner of a motor vehicle may transfer the owner's

interest in the motor vehicle to
one or more beneficiaries
[
a sole

beneficiary
] effective on the owner's death by designating
each
[
a
]

beneficiary as provided by Section 501.0315, Transportation Code.

(b) A beneficiary designation is:

(1) subject to Section 115.003(b), revocable and may

be changed at any time without the consent of the designated

beneficiaries
[
beneficiary
] as provided by Section 501.0315,

Transportation Code;

(2) a nontestamentary instrument; and

(3) effective without:

(A) notice or delivery to or acceptance by the

designated
beneficiaries
[
beneficiary
] during the owner's life; or

(B) consideration.

SECTION 2. Section 115.004, Estates Code, is amended to

read as follows:

Sec. 115.004. EFFECT OF BENEFICIARY DESIGNATION DURING

OWNER'S LIFE. During a motor vehicle owner's life, a beneficiary

designation does not:

(1) affect an interest or right of the owner or owners

making the designation, including the right to transfer or encumber

the motor vehicle that is the subject of the designation;

(2) create a legal or equitable interest in favor of
a

[
the
] designated beneficiary in the motor vehicle that is the

subject of the designation, even if the beneficiary has actual or

constructive notice of the designation;

(3) affect an interest or right of a secured or

unsecured creditor or future creditor of the owner or owners making

the designation, even if the creditor has actual or constructive

notice of the designation; or

(4) affect an owner's or
any
[
the
] designated

beneficiary's eligibility for any form of public assistance,

subject to applicable federal law.

SECTION 3. Section 115.005, Estates Code, is amended to

read as follows:

Sec. 115.005. EFFECT OF BENEFICIARY DESIGNATION AT OWNER'S

OR LAST SURVIVING OWNER'S DEATH. (a) On the death of the owner of a

motor vehicle that is the subject of a beneficiary designation, the

following rules apply to an interest in the motor vehicle:

(1) if
any
[
the
] designated beneficiary survives the

owner making the designation by 120 hours, the interest in the motor

vehicle is transferred to
each surviving
[
the
] designated

beneficiary; and

(2) if
each
[
the
] designated beneficiary fails to

survive the owner making the designation by 120 hours, the share of

each
[
the
] designated beneficiary lapses, notwithstanding Section

111.052, and is subject to and passes in accordance with Subchapter

D, Chapter 255, as if
each
[
the
] beneficiary designation were a

devise made in a will.

(b) If an owner is a joint owner with right of survivorship

who is survived by one or more other joint owners, the motor vehicle

that is the subject of
a
[
the
] beneficiary designation belongs to

the surviving joint owner or owners. If an owner is a joint owner

with right of survivorship who is the last surviving joint owner,

the beneficiary designation is effective.

(c) A designated beneficiary takes the motor vehicle

subject to all encumbrances, assignments, contracts, liens, and

other interests to which the vehicle is subject at the owner's or

last surviving owner's death, as applicable. The transfer to
one or

more
[
the
] designated
beneficiaries
[
beneficiary
] does not affect

the ability of a lienholder to pursue an existing means of debt

collection permitted under the laws of this state.

SECTION 4. Sections 501.0315(a), (b), and (c),

Transportation Code, are amended to read as follows:

(a) The owner of a motor vehicle may designate
one or more

beneficiaries
[
a sole beneficiary
] to whom the owner's interest in

the vehicle transfers on the owner's death as provided by Chapter

115, Estates Code, by submitting an application for title under

Section 501.023 with the designation. To be effective, the

designation must state that the transfer of an interest in the

vehicle to
one or more
[
the
] designated
beneficiaries
[
beneficiary
]

is to occur at the transferor's death.

(b) The legal name of
each
[
a
] beneficiary designated under

this section must be included on the title.

(c) The department shall transfer title of a motor vehicle

to
the beneficiary or beneficiaries, as applicable,
[
a beneficiary
]

designated under this section for the vehicle if the
sole

beneficiary submits
or all beneficiaries jointly submit, as

applicable
:

(1) an application for title under Section 501.023 not

later than the 180th day after the date of the owner's death or, if

the vehicle is owned by joint owners, the last surviving owner's

death, as applicable; and

(2) satisfactory proof of the death of the owner or

owners, as applicable.

SECTION 5. This Act takes effect September 1, 2025.