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What To Do With Your Car After You Die

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You may think your car is older and is not a very important asset — especially if it's a compact or economy-size car — but to your family who have to deal with your estate after you die, it's a fairly big deal. If you don't set out a way for your family to take ownership of the car quickly, it could wind up in probate, which can take months to resolve. That means your family has to deal with storing the car and paying registration and insurance on it. You should look at your options now so your family has less to deal with later.

Transferring Ownership Upon Your Death

Some states allow you to designate who gets the car upon your death by filling out a form at your department of motor vehicles. You would do this now before you die. That form is the car equivalent of the "payable-on-death" instructions you can give to your bank for your bank account beneficiaries. The form allows your designated beneficiary to transfer the car to their name without putting it through probate or getting court permission.

A Living Trust

You can also make the car part of the property you protect through a living trust. If you want all of your estate to stay out of probate, you set up a living trust and deposit everything into that trust. Technically, the trust becomes the owner of everything you own, but since you're the owner or trustee of the trust, you effectively still own everything. When you die, the people you listed as trustees would take ownership of everything and keep everything out of probate. You can make changes to the trust, but there are specific procedures you have to go through. An estate planning lawyer can help you figure out what needs to be done.

Post-Death Affidavit

Some states allow your family to fill out an affidavit after your death that allows them to take control of the car without going through probate. Some states limit this affidavit to estates under a certain value, like $100,000 or $150,000. Others allow your family to do this regardless of the size of your estate.

Speak with an estate lawyer and decide on a specific path that your heirs can take. Setting everything out now and in writing will help them when they are in mourning and may not want to deal with legal issues.