In my decades of practicing estate and probate law, one of the most commonly asked questions has something to do with the transfer of car ownership. How to transfer a car title when the owner is deceased? How to sell a person’s car when that person dies?

There is not always one answer to these questions because the answer can be different under varying situations. To answer this, I always respond with additional questions: Who is the owner? How is the car or cars titled? Who are the beneficiaries? Is the owner married or not? Are there any unpaid loans on the vehicle? The answers to these questions help me identify the ideal steps to deal with the situation.

This post is a deep dive into car ownership concerning estate planning and probate. I hope that when you’re done reading this, you’ve found the answers to your questions about owning or selling a deceased loved one’s car. Most importantly, I hope that this will convince you to consider your car and similar assets when planning for your estate.

Cars in Probate Estate

To start, we ask: What happens to a car if a person dies without a will, trust, or any form of legally binding instructions? The answer is that all of the person’s cars and other properties, what we collectively call their estate, go into probate.

Probate is simply the legal term for the process of evaluating and transferring title under a court of law. The probate court will oversee the transfer of an estate according to state laws. The court assigns the personal representative who will be charged with managing the estate, locating the legal heirs, and distributing the assets. Thus, the ownership of cars and other properties under probate is at the mercy of a court ruling.

In Arizona and California, probate estates valued under $75,000 will be distributed to legal heirs which are the surviving spouses and children. If this estate includes a car or cars, the heirs only need to file a personal property affidavit and get the local DMV (Department of Motor Vehicles) to release the title to them. The heirs can then decide whether to keep or sell the car, as it's already under their name.

When it comes to large estates, those valued above $75,000, the probate court will have the final decision. The appointment of heirs, asset distribution, and other decisions will follow relevant laws and the court process may take years. In the absence of legal heirs and other claimants, the probate court may transfer the estate to the government in a process called escheatment. Escheated estates become the property of the state until heirs turn up or other claimants step forward.

Estate Planning for Cars

As you can see from above, probate is a lengthy and complicated process. On top of that, it also compromises the privacy of the deceased and his family or other relationships. This is why it is critical to plan your estate as early as possible. Not only can you avoid probate with strategic planning, but you also get to ensure that your wishes are in writing. When estate planning for your cars and similar properties, you have the following options:

Option 1: Joint Ownership of a Vehicle

Joint ownership is when the car title is jointly owned by two people. This is a common option for those who want their spouses to own their cars if one of them dies. This type of ownership avoids probate as long as there’s a Right of Survivorship, or when each of the owners is given the right to inherit and sell the car if the other owner dies. Upon one of the car owners’ death, the surviving owner becomes the sole owner and can sell the car without the other’s signature.

Joint ownership, however, has its disadvantages. When you jointly own a car, you open the door to added liability. Having joint ownership runs the risk of the car being open to creditor claims, lawsuits, divorce proceedings, financial difficulties, and other eventualities.

Option 2: Beneficiary Designation of a Motor Vehicle

Every state DMV lets you assign a beneficiary who will inherit your car title upon your death. You must fill out a form where you name who you want to get your car when you die. Remember to sign this form, notarize it, and keep it with your car title. When you die, your designated beneficiary only has to present this form at the DMV and apply to transfer ownership of the car title to their name.

You can re-designate your beneficiary and change or revoke this form at any time while alive. You are also not limited to naming your spouse. You can name your son, non-relatives, or even a trust as a beneficiary. Naming your trust allows you to appoint your successor trustee to take over the vehicle upon your death and split the proceeds through the trust.

Option 3: Car Ownership Through a Trust

Transferring car ownership under a trust is the best option for vehicle collectors or people who own multiple cars. In this case, the cars may be the largest asset of the estate. Trusts are one of the easiest and foolproof ways to organize the upkeep, sale, or distribution of these cars to the owner’s beneficiaries. To transfer your car ownership to your trust, you only have to take your title to the DMV and file for title transfer from your name to the name of your trust.

If your loved one dies and their cars are owned by a trust, the successor trustee will inform you if you are the heir to the cars. You must wait for the successor trustee to administer the transfer of the car to your name before you can keep or sell it.

Option 4: Car as Gifts in a Will

Similar to trusts, car owners can also use their wills to designate who gets their cars upon their death. When creating a will, you can name the person who will get your car as a special gift. And like in trusts, you can also provide instructions if you want your heirs to sell or keep your cars. If you are gifting multiple cars, you can name which of your beneficiaries gets which vehicle.

If a deceased family member assigned you to get their car as a gift, you only have to wait for the will’s executor to complete the transfer. You can keep or sell the car once the title is transferred under your name.

My Final Thoughts on Selling a Deceased Person’s Car

Knowing the details of a deceased person’s car ownership makes the process of owning or selling the car easy. If you are one of the bereaved family of the deceased, any difficulties in this process often add to the grief of losing them.

If the above information is inadequate to help you tackle these car ownership difficulties, please don’t hesitate to contact us here at Rilus Law. We have dealt with countless complicated property ownership transfers and probate proceedings before. I guarantee that we have come across a similar situation to yours. Get all of your questions answered by scheduling your free Personal Family Legal Session today!

How to Sell a Car of a Deceased Person