What’s the best way to pass on a car?

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Q. What is the best way to pass a car to your heirs when you die? Can you transfer it over in a will? Should I ask my father to put his car in my name or into a trust? I would hate for there to be a big delay like there was for my neighbor.
— Daughter

A. Yours is a great question, and one most people don’t think about until a death occurs.

In estate planning terms, a car is considered personal property, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

A car can be transferred by a specific reference to it in the will or by a general reference to personal property – unless it is a collectable and then it requires a specific reference, Romania said.

Generally the executor of the estate, if there is a will, or the administrator, if there is no will, would execute the bill of sale and the old title to sell the car to a third party or will execute the old title to transfer the car to the person who inherits it, Romania said.

“An original document provided by the Surrogate evidencing the executor’s authority to act on behalf of the estate referred to as Letters Testamentary – or if there is an administrator, Letters of Administration – will also be necessary and should be given to the new owner,” she said.

If, however, the vehicle is owned by both husband and wife, or by civil partners, the transfer can be made by submitting a copy of the death certificate, the old title and an affidavit supplied by the Motor Vehicle Commission confirming the status of ownership and the co-owner’s death without the need for Letters Testamentary or Letters of Administration, she said.

Additionally, where the estate is small, under $50,000 in the case of the car passing to a spouse/civil partner or under $20,000 where the car passes to another heir, the documents required by the Motor Vehicle Commission will include an Affidavit of the Spouse or Next of Kin as filed with the Surrogate instead of Letters Testamentary or Letters of Administration, in addition to the old title, she said.

Romania said to complete the transfer, the transferee will also need the odometer reading on the vehicle, the transferee’s driver’s license and insurance information and payment of the fee charged by the Motor Vehicle Commission.

“Considering the ease of transfer, there is no reason to consider placing the vehicle into a trust prior to death, which may increase insurance rates, or transfer the vehicle to a different owner prior to death, which again could increase insurance rates,” she said.

There are several items that could cause a delay in the transfer of the vehicle’s ownership.

Among them, there could be a lien on the vehicle for a car loan that would need to be paid before the car can be transferred. Or there could be if inheritance or estate taxes or other creditor claims that must be addressed before a distribution can be made, Romania said.

Delays could also happen if there is a disagreement among the beneficiaries as to whom should receive what assets in distribution.

Also, there could be delays if there’s trouble getting a duplicate title because the old title can’t be found. Or there could be a family member who is not addressing the administration of the estate or not disposing of an asset because of grief caused by the loss of their loved one, she said.

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