Funeral home broker in Texas: selling or buying a funeral home in Texas

Texas is the home market of the two largest public deathcare companies, and its law places almost no limits on who may own a funeral home. That combination produces a deep buyer pool. It also produces a two-track closing, because the license side and the prepaid side are run by different agencies on different clocks.

Who is allowed to own a funeral home in Texas?

Practically anyone. Section 651.351(b) of the Occupations Code says the chapter “does not require a funeral establishment to be owned by a person licensed under this chapter,” so corporations, private equity platforms, and individual investors may all hold title.

The catch is operational rather than legal. Every establishment must designate a funeral director in charge (FDIC) who is “ultimately responsible for compliance with the mortuary laws.” An owner without a license is buying a business that cannot run without one. If you are that buyer, our profile of the non-licensed investor buyer explains how those deals are usually staffed.

Contrast that with New York, where an individual owner must be licensed and a corporation must work through a licensed registered manager. Texas imposes no such test.

Individual licensing is separate from ownership. Texas issues a funeral director’s license and an embalmer’s license (one person may hold both), plus provisional licenses for trainees.

What does the Texas Funeral Service Commission require when a firm changes hands?

The buyer picks one of two filings, and the FDIC must be in place without a gap. TFSC’s establishment licensing page says a change of name, location, or owner calls for a new application, while its rules also allow an ownership change by notice on the commission’s form within 30 days.

The routes carry different risk. Under the amendment, the new owner keeps the license number and complaint history and becomes responsible for all past and current penalties. A new application starts clean. If the buyer takes the amendment, the seller’s indemnity for pre-closing violations should be specific.

FDIC rules shape multi-site deals. A change of FDIC must be reported within 15 days, and one person may serve as FDIC for more than one establishment only if the stores share ownership, sit within 100 miles of each other, and the executive director grants a petition. A buyer stitching together a cluster should map distances before signing. Our guide to keeping a funeral director in charge through closing covers the staffing side.

How do Texas prepaid funeral contracts move to a new owner?

Through the Department of Banking, on a strict schedule. Under Texas Finance Code Chapter 154, permits are not transferable, and the permit holder must notify the department and the trust depository or insurer within 7 days after signing a contract to transfer the business or 25% or more of its ownership.

If the buyer will own 51% or more and holds no permit, it must apply for one. The department decides a complete application within 16 days, and prepaid contracts may not transfer until the permit issues. That makes the buyer’s permit a closing condition, not a post-closing task.

How much of each payment sits in trust?

Texas lets the seller keep up to half of each payment until it has received 10% of the contract price, then requires the rest to be deposited within 30 days. In effect, at least 90% of the price reaches an insured restricted account or a Texas fiduciary. Investments follow the Uniform Prudent Investor Act under a written plan filed with the annual report.

Contracts are cancellable. A purchaser who cancels a trust-funded contract receives the amount paid plus half the earnings, less the permitted retention, unless the purchaser waived cancellation in a separate signed writing. Insurance-funded contracts are allowed on Texas Department of Insurance-approved forms, with premiums collected only by a licensed, appointed agent.

Medicaid treatment of irrevocable Texas contracts was not verified in our research; confirm it with the Department of Banking or an elder-law attorney before relying on it. Whatever the funding, run the backlog through The Preneed Reconciliation Ladder so the trust balances, policy values, and current-price obligations agree before anyone negotiates price.

What changes when a crematory or cemetery is part of the deal?

Each adds a license and a regulator. A crematory needs its own TFSC crematory establishment license, and the holder must also hold a funeral or commercial embalming establishment license or own a perpetual care cemetery. TFSC keeps a separate crematory change-of-ownership amendment form, so file both.

Air emissions fall under the TCEQ permit by rule for crematories, which “must be claimed before construction may begin.” Ask for the claim and the retort’s design records. On operations, cremation requires a signed authorization form, and Texas bars cremation within 48 hours of death unless a justice of the peace or medical examiner waives the wait in writing.

Perpetual care cemeteries answer to the Department of Banking, which issues the certificate of authority. The same 7-day transfer notice applies, and a buyer acquiring more than 50% without a certificate must apply before the perpetual care fund moves. A funeral establishment may not sit inside a cemetery, but we found no ban on owning both.

Who buys funeral homes in Texas, and what do they look at?

Public consolidators lead, with regional and individual buyers filling in around them. SCI’s FY2025 Form 10-K lists 164 Texas funeral service locations and 65 cemeteries and names Texas among its three largest states by revenue. Carriage Services’ FY2025 Form 10-K reports 15 owned and 1 leased Texas funeral homes plus 5 cemeteries.

Both are Houston companies. Our explainer on public consolidators and private equity in deathcare covers how those buyers think about density.

Disposition mix is the other Texas variable. CANA’s industry statistics put the 2024 Texas cremation rate at 55.6% (a provisional figure), 36th among states by percentage but 3rd by number of cremations. Burial still drives a large share of revenue here, and buyers will model how quickly that shifts; see how rising cremation rates affect funeral home values.

In what order should a Texas sale be closed?

Sequence the two agencies so neither holds up the other. In our experience, this order works:

1. Before the LOI: confirm the buyer’s FDIC plan, the 100-mile map for any shared FDIC, and whether the buyer already holds a prepaid funeral permit.
2. At signing: send the Department of Banking and the depository or insurer the 7-day transfer notice; notify the perpetual care cemetery regulator on the same clock if a cemetery is included.
3. Within days of signing: a buyer without a permit files a complete application so the 16-day decision clock starts.
4. Before closing: choose a new TFSC application or the 30-day amendment, and price the inherited-penalty risk into the indemnity.
5. At closing: designate the FDIC, file the crematory amendment if relevant, and confirm the TCEQ claim records changed hands.
6. After closing: report any FDIC change within 15 days and reconcile the first post-closing trust statement to the register.

For the national picture these steps sit inside, start with the funeral home M&A market overview.

Texas rules at a glance