17 Feb Are Mobile Homes a Stepchild in Beneficiary Designations?
It is often the goal of many to simply avoid probate even though it is often best to have a Will or Trust to consider protection for the beneficiary. Financial accounts can be established with a beneficiary designation to avoid probate. Real estate can be transferred by Life Estate deeds and Transfer on Death deeds to avoid probate. Even cars can have a beneficiary designation by completing a form (VTR-121) with the Texas Department of Motor Vehicles. However, the treatment of beneficiary designations has been overlooked for mobile homes in cases where the landowner and mobile homeowner are different.
Unlike vehicles, manufactured homes (a/k/a mobile homes) are titled by the Texas Department of Housing and Community Affairs. Ownership records can be accessed through the Texas Department of Housing and Community Affairs (the “Department”) website. All you need is the first and last name of the owner unless it is a common name where more information is needed (i.e. the label/seal number or the serial number which is often included in the real property records of the county where the property is located).
A manufactured home (mobile home) can be converted from personal property to real property if the owner owns the land in which the mobile home is sitting (it must be attached) or you are leasing under a long-term lease if lienholders approve the lease and by placing the consent with the Department that it be treated as real estate. If there are no liens the lease must be for five years.
If you are not leasing, any liens must be extinguished unless a title company insures against existing liens.
Additionally, you must complete an application for Statement of Ownership and pay the appropriate fee. Unless a certified copy of the Statement of Ownership is submitted, the treatment as real property is not complete.
After you have recorded the certified copy of the Statement of Ownership, then the owner can execute an enhanced life estate (Ladybird) deed or Transfer on Death deed which is particularly important if the owner receives Medicaid benefits as this would be needed to avoid a successful claim for recovery to the extent Medicaid benefits have been advanced (if it is a Medicaid applicant’s homestead). You should also send a copy of the recording information to the Department.
The problem is what if you don’t have a long-term lease or own the property in which the mobile home is attached. You can’t do a Ladybird deed or Transfer on Death deed on personal property. It is anticipated that the state legislature will address this accordingly but until that time mobile homes are the stepchild of beneficiary designations if not attached to the land.
The good news is that the Texas legislature is now considering HB 3395 that will permit a beneficiary designation on a mobile home.
If interested in learning more about this article or other estate planning, Medicaid and public benefits planning, probate, etc., attend one of our free upcoming Estate Planning Essentials workshops by clicking here or calling 214-720-0102. We make it simple to attend and it is without obligation.