Avoiding Probate For Your Car

Avoiding Probate For Your Car

At Egeli Law Firm, PLLC, we often talk to clients who are interested in the concept of avoiding probate but have reasons for not wanting to commit themselves to a living trust.  For these clients, the use of joint ownership, rights of survivorship and legally permitted pay-on-death mechanisms are some of the more popular ways to avoid probate for titled assets such as real estate, vehicles, boats, trailers, mobile homes, bank accounts and investments accounts.  There are potential benefits and drawbacks to these various probate-avoidance methods, and the client should carefully weigh the pros and cons in consultation with their estate planning advisor.

We have participated in the administration of many estates over the years.  As a result of that experience, we have observed that the one asset that most often creates the need for probate is the decedent’s car.  In some of the estates where the decedent aggressively used joint ownership and rights of survivorship to avoid probate for all other titled assets, the decedent still owned a car in his or her individual name.  Because the sale or transfer of the car could only be done by the executor of the decedent’s estate, the heirs were faced with opening an estate solely because of the vehicle.  

Fortunately, the jurisdictions in which we practice have procedures in place that allow a person who owns a vehicle free and clear of liens to designate a beneficiary on the certificate of title.  If these procedures are followed, the result is that the car passes to the decedent’s designated heir more or less automatically, without the need for probate. It is important to point out that these procedures are administered by each jurisdiction’s department of motor vehicles.  Perhaps it goes without saying, but we will note that the beneficiary designation must be done while the decedent is alive.

In the Commonwealth of Virginia, the procedure for transferring ownership of a car to a beneficiary outside of probate involves a two-step process.  First, the vehicle owner must complete a DMV form designated as a “VSA 18” that includes the beneficiary’s information and return the completed form to the DMV customer service center.  If the vehicle owner later changes their mind about the beneficiary getting the car, the same form would be used to change or remove the beneficiary. Second, after the vehicle owner’s death, the beneficiary would need to complete and submit a DMV form designated as a “VSA 67,” and pay a nominal fee (currently $15.00) to have a new title issued in the beneficiary’s name.

This discussion of how to transfer a car outside of probate is one example of the procedures available to avoid probate over titled assets.  There are different procedures and options available for other titled assets such as real estate, boats, trailers, mobile homes, bank accounts, and investment accounts.  If you are interested in learning more about whether any of these probate avoidance mechanisms make sense for you, please contact Egeli Law Firm, PLLC. 

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