A big part of estate planning will be going through your assets and deciding not only who you want to get what, but how you want this transfer to occur. After a house, a person’s car is usually one of their more significant, tangible assets. As such, it can be a good idea to put a specific plan in place for your car when you are estate planning. There are a number of options for how the transfer of vehicle ownership can occur and some most certainly have more benefits than others.
Remember Your Car When Estate Planning
Many people may include their car in their will, name the person they want to inherit it and that is that. This is a fine and effective way to deal with your car in your estate plan, but there are other options out there. Other options come with benefits not afforded by transference by will reference. For example, other means of handling a car in an estate plan can mean that the vehicle will avoid having to go through probate. This can save on time and expense, not to mention that the beneficiary is likely to have access to the asset sooner rather than having to wait till it works its way through probate. Furthermore, other options can minimize transfer fees and taxes as well as providing asset protection.
Transferring your vehicle into an automobile trust, for instance, allows the avoidance of probate in regards to the car. It also allows spouses to retain vehicles under separate names which can be important for asset protection. An automobile trust can function as a kind of “pour over” trust. This means that the vehicles can be poured from the automobile trust into a main revocable trust upon your passing.
It should be noted that a vehicle cannot be transferred into a trust if it is subject to a loan or lease agreement. Upon the satisfaction of the loan, then the vehicle can be transferred in a trust. Regardless, however, there are other options for addressing a vehicle in an estate plan other than with a will or a trust.
If you are married and wish for your spouse to inherit your car, you can be sure to title your vehicle so that it is held jointly with rights of survivorship. The rights of survivorship designation is crucial and it is not the default form of title so you will need to actively elect for this type of title. The joint titling with survivorship rights means that your ownership rights to the vehicle will automatically transfer to your spouse upon your death. The vehicle will avoid probate and the transfer will be seamless. This is a great option for married individuals.
Estate Planning Attorneys
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