24 May What happens to my car lease when I die?

Q. About six months ago I leased a car for the first time. What happens if I die before the lease is up? Does my wife have to keep paying the lease? The salesman said the dealer would take the car back and no more payments would be owed, but it’s not in the paperwork.
— Still driving

A. We certainly hope you outlive your car lease, but it’s a great question.

The law, however, isn’t on your side and your wife may be at the mercy of the car dealership and its financing company.

In 2017, the New Jersey Assembly passed a bill that would permit early termination of an auto lease upon the death of the lessee and prohibit the imposition of fees as a result, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

But the bill never passed in the state senate, she said.

There are plans to reintroduce the bill this session, but nothing yet.

That means there’s no law in New Jersey that prohibits the auto company from charging fees for early termination upon the death of the lessor, Whitenack said.

“While several auto companies may have policies permitting early termination upon death, in many cases, the lease continues and the deceased lessee’s estate is liable for making the payments,” she said.

That’s because a lease is a contract, she said.

If the written lease does not provide for early termination without fees, the lessee’s estate may be required to continue making the payments, Whitenack said.

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This story was originally published on May 24, 2019.

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