Aside from a home and other real property, one of the largest assets a person owns is often their vehicle. As such, it can be important to pay unique attention in assessing your options as to what to do with your car when you are estate planning. With proper planning, you can avoid having your vehicle go through probate. You can also maximize available liability protections regarding your vehicle and any damage you might cause with it in the event of an accident. On top of all of this, proper estate planning for your vehicle can help avoid excessive transfer fees and minimize tax liability.
What to Do With Your Car Title When You Estate Plan
There are a few different things you can do with your car title when considering your estate plan. Your options will vary depending on your own specific circumstances, such as whether or not you are married and whether or not there is any kind of car loan in place or lease agreement. You may want to consider transferring your car title into a trust which can offer it creditor protection as well as probate avoidance. Note, however, that you cannot transfer your car if there is either an auto loan in place or the car is subject to a lease agreement.
A trust for your car, if it is a viable option, can be a great choice for how to hold your vehicle. It will avoid probate. The trust can offer creditor protection. You can name a beneficiary who will inherit ownership of the vehicle pursuant to the terms set forth in the governing trust document.
If you are married, there are ways to title your car so that it automatically passes to your spouse after you die. Some people mistakenly assume that this can be accomplished by joint title, but you have to be more specific than that. The car title needs to be held jointly with rights of survivorship. You must elect for the rights of survivorship as it is not the default option. Otherwise, the joint title will only mean that you both own half of the car, but your half of the ownership interest will have to go through probate upon your passing.
In some states, you can title a car so that it is a transfer on death asset. If this is available to you, be sure to list a beneficiary so that ownership of the vehicle automatically passes to them upon your death. This will avoid the need for your car to go through probate.
Estate Planning Attorney
When you put a comprehensive estate plan in place, you can provide for those most important to you in a way that maximizes all the benefits an estate plan has to offer. Take care of your loved ones and all that you have worked for during your lifetime. Talk to the team at Verras Law about putting a strong estate plan in place uniquely designed just for you. Contact Verras Law today.