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Texas Considers Beneficiary Designation on Vehicle Titles
Wednesday, March 29, 2017 6:45 AM

SB 869 by Sen. Joan Huffman (R-Houston) and HB 1753 by Rep. Jessica Farrar (D-Houston) would authorize a beneficiary designation that transfers a motor vehicle at the owner’s death. The author’s stated goal is to provide common-sense legal guidance for those who cannot easily access the services of an attorney.

The bill is another in a series moving public policy to allow citizens to avoid probate by allowing a designated beneficiary to expedite transfer of assets. The owner of the vehicle could designate a beneficiary by submitting an application for title paperwork, similar to a Payable-on-Demand beneficiary on account paperwork.

The beneficiary would take the vehicle subject to all liens. Transfer of title would not affect the ability of a lienholder to pursue an existing means of debt collection permitted under Texas law.

Fifteen states allow title to vehicles to transfer on death. Two states do not allow it if there is a lien on the vehicle, three of the states are silent as to the rights of lienholders, and the others provide protection of lienholders to varying degrees. Click here to see the status of lienholder rights in those states.

The bill received a hearing in the Senate State Affairs Committee Monday and was left pending.

Contact Texas Credit Union Association President Jeff Huffman at 469-385-6488 or jhuffman@txcua.coop for more information.