Texas Legislative Updates

In addition to the tax changes made at the federal level this July through the “One Big Beautiful Bill” Act, the Texas State legislature passed several laws going into effect on or near September 1, 2025.  Texas, largely through the efforts of legacy advocacy groups and feedback from lawyers in the field, often addresses estate, trust and guardianship legal issues through updates to the law.  This legislative session was no exception, especially for procedural aspects of estates and guardianships.  We monitor these changes for our clients, and this article provides a summary of the most interesting bills that passed, and in some cases, didn’t pass.

1. Recording of Deeds, Mortgages and Conveyance Documents. As you’ve probably heard, Texas has a problem with bad actors filing fraudulent deeds and mortgages with real property records to scam Texas landowners of their titles.  A person will prepare a deed saying that a homeowner transferred their property to them, or that they were granted a mortgage on the property, sign it fraudulently and file it with the county clerk’s office.  The clerk’s office general accepts any validly executed documents as they do not investigate the creation of the documents.  A homeowner finds out when they list their property for sale, try to refinance, or worse, when someone shows up at their house to move in.

To combat this, the Legislature came up with two solutions, one of which passed.  The solution that did pass is that a clerk’s office, if they believe in good faith a filing to be fraudulent, may reject the document and notify the last known owner of the property.  The more involved solution which didn’t pass, would have required conveyances to be signed by the grantor before two witnesses, all who acknowledge the document before a notary.  Essentially, it adds more steps to execution of documents to make fraud more difficult, although professionals such as lawyers and title companies would be exempt.  This was ultimately vetoed, but continues to be considered for future legislative sessions.

There is also a related bill which increased criminal penalties for forgeries of these types of documents in an effort to deter fraud.

2. Asset Protection Trusts. Generally stated, American law disfavors dodging your own creditors, and Texas follows that concept.  Business entities like limited liability companies and corporations are exceptions to that rules because they encourage business investment, and so there is an acceptable trade off.

Despite this concept, many states permit trusts, often called domestic asset protection trusts, by which a person creates a trust, retitles assets to it and those assets become protected from their creditors, all of which have varying degrees of effectiveness or exceptions such a past due child support.  Texas has considered this for a while, prompted strongly by banks and financial institutions.

The most recent proposal for asset protection trusts failed, ironically, because it went too far in limiting creditors with known claims, and potentially would go so far as to affect the rights of spouses from reaching their own property.  So, Texas hasn’t passed this yet, but it will undoubtedly revisit it in the near future.

3. Constitutional Amendment to Ban Estate Taxes.  Texas currently doesn’t have state capital gains, estate, gift or generation skipping taxes.  However, there are two bills that seek a state constitutional amendment seek to prohibit Texas from passing such taxes, further solidifying that tax stance.  The bills are going to be voted on in November.

3. Alzheimer and Dementia Research. In relationship to the topic of aging, Texas will now require court-appointed guardians of persons who are over 60 years of age or otherwise have a diagnosis of dementia or Alzheimer’s to take an annual training on those topics.  Even more, Texas passed a bill to create and fund an institution to research diseases such as dementia and Alzheimer’s, including prevention of them.  The institute will receive substantial initial funding with further funding per year.

3. Prohibition of Land Ownership for Certain Foreign Nationals. Although it currently facing a lawsuit as to its constitutionality, Texas passed a law prohibiting ownership of certain types of land in Texas, both individually and through business entities, which are ultimately controlled by certain foreign governments or nationals of those countries who do not lawfully reside in the U.S.  These countries include China, Russia and North Korea, among others.  There are exceptions for U.S. citizens or lawful residents, especially for ownership of a homestead.  Several other states either have a similar law or extra reporting requirements for real estate transactions aimed at preventing bad actors from establishing a foothold in the U.S.

This is just a brief overview of some of the more interesting developments from this past legislative session.  If you have any questions or concerns as to how this affects you, please feel free to contact our office.

ABOUT THE AUTHOR: Kevin Horner is Counsel at Rapp & Krock, PC in the Probate, Estate Planning, Elder Law, and Trusts group.

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