Cars and other vehicles (motorhomes, boats, motorcycles, etc.) each have a title and require your signature to transfer the vehicle to another person. That means they are subject to probate after your death UNLESS you have the vehicle “owned” or titled in the name of your living revocable trust.
I hear all the time that you shouldn’t put cars into a living revocable trust. People for some reason think it will expose the assets of the trust to liabilities associated with the vehicle. The trust in no way protects your assets, so that reasoning is simply false.
You should put your vehicles into your trust in order to avoid probate. Only those assets held by the trust will avoid probate.
Most states have a procedure for moving a vehicle into the name of a trust. (That’s assuming you already own the vehicle before you set up the trust.) Call the Department of Motor Vehicles in your state and ask them what to do. You will need to take your current title in and get a new title issued. There will be a charge for that.
Some states insist on a “sales tax” or other fee structure whenever a vehicle changes hands. If you run into big problems, just forget the exercise and keep your current car the way it is before you created the trust. All states have a way that a vehicle can be transferred at death without a full probate. You can basically cheat on a vehicle. It isn’t like a bank account or piece of real property where there is no work around the probate problem.
I am willing to bet you will get another car before you die. The new car needs to be titled in the name of the trust when you buy it. The trust’s info needs to be on the title as the owner. Name of trust – Date of trust – and name of trustee. You will sign the title as trustee, not in our capacity as an individual. Remember, you are wearing your trustee hat, not your personal hat.
To get the trust’s information in the little space on the title paper, you may have to abbreviate. John Doe Trust could be Doe TR. January 1st 2015 could be 1/1/15 and John Doe Trustee could be John Doe TTEE. So it is Doe TR, U/A 1/1/15 John Doe TTEE. That’s not too bad. U/A stands for Under Agreement.
With that information, the trust’s ownership will be unambiguous. When you sell the car, you will sign again as trustee.
By federal law, moving the vehicle into a true living revocable trust (grantor trust) does not affect the auto insurance, although when you get insurance for the new car, you need to reflect the true title owner (the trust).
Taking title in the name of the trust does not make it a commercial vehicle for property tax purposes. My son took title in the name of his trust and got an $8,000+ property tax bill the first year. We had to go down and educate the DMV that a trust was not a business. The taxes dropped to $1,200.
I was told by an auto buying service (similar to CarMax) that they could not buy a car in Florida in a trust. My father’s car was not in his trust. When I tried to get the car in my name at DMV after my dad died, they tried to make me get a new license and registration too for over $500. I live in Kansas and can’t reg a car in FL. My father’s insurance agent told me what to say. That I wanted a same day title so that I could sell the car. That cost $88 and is done right away. Unfortunately, I had to fly down an extra time due to the first snaffew.
In Kansas I have it in my trust, as I did in Oregon. In Oregon they have no sales tax, so that’s not a problem. In Kansas, who knows how it works. I just thought that it was the right thing to do.
Barbara,
Sorry to hear about your experience. It sounds like your dad got some bad advice.
Trusts can buy cars in Florida. I often tell clients that if the dealer won’t allow to buy the car in the trust, just walk away. It’s amazing how things become possible when they are about to lose the deal. Having the car in the trust would have avoided some of the problems that you had.
Hi, I attended your boot camp last fall (very good). This car example is very similar to a real estate issue I have pending and I’ve been advised otherwise. I am married but I own a 4-plex owned in my name only because it was purchased with 1031 monies originating prior to my marriage. I’d don’t want to form an LLC for it (California). I have plenty of insurance for it and an umbrella policy too. I want my Family Trust to be the beneficiary of the property but I was advised if I place it in my Trust, then all the assets in the Trust will be exposed if a lawsuit emanates from the property. I was advised to form another Trust just for the 4-plex and have the beneficiary of the 4-plex Trust be the Family Trust. However, you car titling example seems to negate the need for this extra step and forming a new particular Trust for the 4-plex. Could there be something I’m missing between the car vs 4-plex situation? Should I form the new 4-plex Trust, or should I just Transfer the property into my Family Trust? I live in California. Thanks, Dan
Dan,
Good to hear from you! This is a very specific case that requires talking with you directly. Call our office at 801 802-9020.
Great post, very timely too as we are getting our vehicles registered in a new state. Thanks Lee!
Always great information.
For several years, I had my personal vehicles titled in the name of my revocable family trust. Then my insurance company informed me that although my auto policy covered the vehicles, the coverage of my umbrella policy did not extend to the trust, because the umbrella policy was in my name, not the name of the trust. I have since transferred the autos into my name (not the name of the trust).
Peggy,
Many companies do not understand revocable trusts and how they work. If they see that trust title and don’t know what to do, they just say that they can’t. Because the revocable trust is a grantor trust it should be invisible to the insurance company. I have often found that if I talk to someone a little higher on the pay scale that they are more experienced and will work with you. If not, then it may be time to get a new insurance company.
Lee,
In my Revocable Trust document, I left my cars to specific individuals and was very specific in the description of the vehicle and to whom it should go. Can’t my successor trustee then sign the title on my behalf in order to transfer the vehicles?
When signing the title the new trustee must make sure and sign as trustee of the trust. They would not sign their own name but would sign their name and state that they are the trustee of the named trust on the car title. They could then transfer the car to the person who is supposed to get the car. This only works if the car title is in the name of the trust.
I am stuck. My fiance passed away a month ago. He assigned me as executor. On his vehicle registration he has the lien holder as Gothard Family Trust. As far as I know I was not named specifically as the trustee of this trust yet…it was in process when he passed. I know have the vehicle but how can I sell it if I can’t show I am trustee and only have executor paperwork. Will this cross over for licensing reasons, if not how do I go about selling it? This was suppose to be sold after his death to go towards his final expenses of returning home to UK for burial so I am in a time crunch…help!
Pamela,
If the vehicle is in the trust, who ever is the successor trustee is responsible for the vehicle. If you are not the successor trustee then there is not much you can do. You will have to work with the trustee to get the car sold and the funds used to pay for final expenses.
When my Dad passed away, none of the vehicles were in the Trust name. However, the Oregon DMV allowed my Brother’s signature as the Trustee along with a Certificate of Trustee Letter that we had done for this purpose. I think it cost us about $150.00 to have the Lawyer to verify the Trustee (my Brother) and write the letter. With this we were able to sign off on all the vehicles, or my brother was as the the Trustee. Do All States Allow this?
Dixie,
Most states have similar processes but are not all exactly the same as this. Some other states have the trustee fill out an affidavit that then allows them to sign for the car. It can also vary from DMV to DMV. I have seen a DMV that allowed someone to use a durable power of attorney to sign for the car of a deceased person.
I am inthe process,of starting a business in ca.
Im reg,state and fed.
Whats the next step?
A friend of mine passed away recently and before she died she put her car in a living trust and told me that when she died it was mine. The lawyer said it had to be titled to me prior to death and nothing was in the will,and that I was not named as trustee. What forms had to be filed at DMV in Virginia?
Cheryl,
If the car had been put in your name prior to the lady’s death, she would have been just giving it to you. In order to receive the car after her death, it would have to be stated in the trust that you should receive the car. You don’t need to be the trustee. Whoever the trustee is will carry out the terms of the trust. If the trust doesn’t mention the car and it is property of the trust, the car will be distributed generally to the beneficiaries of the trust. There isn’t anything that you can file at the DMV to claim the car if the trust doesn’t say you get the car and the trustee doesn’t give it to you.
I have trust fund money and I need to start a business I need trust fund to buy me a car what should I do
Fikile,
If it is your living revocable trust, it is your money, spend it like you want. If it is not your living revocable trust, but another trust, the trust could make a distribution of principal of money to you (according to the terms of the trust) or the trust could make you a loan. Use a note to memorialize the loan.
My dad passed away leaving a trust. My sister passed away before he did leaving her two adult children to receive her share. However, his vehicle was not in the trust and they did not have to sign off in the title as we, brother and sister had to. This is all in Michigan. Do the Bruce and nephew still receive money from selling of the vehicle?
If you transferred the car into the trust then they would get a share. If the car was transferred into your own name then you may or may not need to share with them depending on state law.
I am unsure if the insurance company needs to know that the vehicle is in a trust. I live in Ohio and a but consuming. Would love your advice. Janicesolar799@gmail.com
Jan,
If it is a living revocable trust, the insurance company doesn’t really need to know about the car in the trust, because technically they have to disregard it. It doesn’t hurt to tell them what is going on.
My husband and I just purchased a vehicle and asked that it be put in the names of each of us, with trustee. I,e, John Doe, Trustee OR Mary Doe, Trustee. The title just came back “Doe Trust” from DMV. Is that acceptable, or does the exact name of the trust need to be stated. We live in CA. I read your statement above, but wasn’t clear about the exact name of the trust.
The name of the trust has to have the 1. Name of trust (which could probably get away with Doe Trust as short for John and Mary Doe Living Revocable Trust) 2. Date of trust (date the trust was created on) 3. Name of trustee(s) John and Mary Doe TTEE. Calif is really hard to work with. Who knows what CA DMV wants.
If there is still a lien holder (in my case a loan from a credit union), how can I transfer my automobile to a trust?
Would putting the car into a revocable trust help avoid license plate scanners that are now used by law enforcement, since a “trust” has no driving record with the BMV? Thanks in advance.
If you have a lien on your car you will probably not be able to transfer the vehicle into a trust. I am not sure about license plate scanners as each state has their own rules and procedures for them.
If grandfather creates a Subtrust upon his death for his 26 year old granddaughter and she needs a car to go to school, does the trustee buy her a car naming the Trust as Owner, or will it be put in her name? Also will the Trust pay for insurance and maintenance? I’m assuming a Subtrust pays her tuition and living expenses. Thank you.
Melinda,
All of this depends upon the terms written into the trust as to what the trustee can and cannot do with the subtrust. Some of it will be what the trustee wants to do. I would probably say the car should be in her name. The trust isn’t buying a car for the trust, but for the beneficiary. It would be her car.
I am purchasing a car from a local dealer. I am also getting a auto loan from my bank. My intention is to put the title of the new car into my living trust. Does the new auto loan need to be titled with the new trust name as well? The dealer says that if the bank puts the loan into my personal name and not into the trust name, he can’t title the car into the trust name. Is this true?
Jeff,
If you are getting a loan to purchase a car then you typically are not going to be able to put the car into the trust.The bank would have to approve the title being put into the trust and they usually will not allow it. It certainly isn’t law that the loan and the title have to be in the same name, but play the game with them. it isn’t critical that the car be put in the trust. I am pretty sure every state has a “work around” that will let the family change title to a care without probate. So, they have you over a barrel with the mortgage. Just do what they want, and no worries.
Lee,
My sister’s attorney created a living revocable trust and Sis named me the successor trustee. Although Sis did not retitle the car from herself to her trust’s name, the attorney did also create for her a Bill of Sale document which transferred all her personal property (including motor vehicles owned or purchased in the future) into the name of the trust. A year and a half later, Sis passed and I am trying to sell the car. The name brand dealership tells me I have to go to DMV to retitle from herself to me personally, and once retitled and registered to me, I can be the seller to them. I argued the Certificate of Trust Existence, her Trust Document (naming me successor TTEE), the Bill of Sale, and her Death Certificate in Iowa was enough for me to sign her Title (that’s still in her personal name) as Successor TTEE and Seller to them as Buyer and avoid the trip to DVM. Also because I want the proceeds check to be in the name of her trust (not me) that I can deposit directly into the bank trust account I had to open (so not as to commingle personal and trust monies). They seem convinced otherwise.
Steve,
They are in the driver’s seat, so you have to play the game. You could just endorse the check over to the trust’s bank account and keep it out of your records. The DMV will probably do the retitle – for a fee. The bill of sale or listing on a schedule in order to get assets into the trust works from a legal standpoint, but not a practical standpoint in most situations.
Hi I’m interested is setting up a trust to put a vehicle I’m buying under and strictly that. What is the process from the bill of sale/title to registering the car at the NY DMV to insuring the car?
I want a trust strictly for more privacy and intend to have myself as the grantor, trustee and beneficiary.
Jaek,
In titling the car in the name of the trust you have to use the name of the trust. the name of the trust MUST include. 1. Name of trust 2. Date of trust. 3. Name of trustee. All three have to be there. The trust isn’t going to give you hardly any privacy. The only reason you use the trust is for probate or possibly estate tax planning. NY is so wacked, I couldn’t tell you the rules on registering the car in the name of the trust. I assume just have the title made out in the name of the trust (as stated above) and then the car is owned by the trust. I remember people having trouble with cars and NY rules, so I am not sure, but normally just put the trust’s name on the title.
The title to my car is held in both my wife’s and my name, with either able to sell or transfer. We are establishing a trust, but is there any necessity to put title to our car in the name of the trust?
same question re bank accounts held jointly in both names, or in a TOD account?
Gilbert,
I would put the bank accounts, etc. in the trust. If you both die together, the family may end up having to probate the account, even though it is a joint account (both joint owners are dead). The car is not as big of a deal, because the family can use a work around probate process that I believe all DMVs have. Buy your next car in the name of the trust.
My brother lives in Oregon, I live in Washington State. Can I set up a trust in Oregon (possibly with my brother and I both listed as trustees) and register the trust’s car in Oregon to avoid high taxes in Washington?
Zach,
The “location of the trust” shouldn’t make any difference as to where the car is registered. They never ask the “situs” of the trust when the trust takes ownership of an asset. The trust can own assets in any state.
This is very helpful information.
2 years ago I was given a 1970 auto from a friend whom bought the auto new. My friend is still alive. I have been storing the auto for over 2 years now.
The auto was registered, insured, and driven by my friend until 2007. My friend does not possess ownership papers (pink slip) The registration has been in my friends name until 2007 when he placed the auto in non-op with the Ca DMV. The 2007 and current non-op notices show a finance company still holds title. The finance company financed the auto for 3 years as new in 1970. Certified letters to finance company show undelivered/no new address. The finance company no longer exists. What must I do to obtain ownership and then re-register the vehicle? The DMV says they cannot transfer title without finance company sign off.
Dwight,
I don’t know. You have got to get someone in the DMV that will tell you how to solve the problem.
Hi, I’m the executor to my mother-in-laws estate. She and her husband registered their car to their revocable trust. He passed away in 2015, and she has dementia. The trust names her son and daughter (my wife) as the sole beneficiaries. In order to transfer the title to my brother-in-law (her son) in accordance with her stated wishes before the dementia diagnosis, do I sign the title as the trust executor and provide a copy of the death certificate?
Tom,
You will sign as successor trustee, if you are the successor trustee. The successor trustee will need to give whatever evidence the DMV in the state asks for. That largely depends on which individual you are dealing with. Copy of the trust, death certificate, whatever.
Hi, Your posts have been very helpful, thank you. We have a situation in Michigan where someone is the successor trustee of a trust in which there are no spouse, descendant, parents, or siblings. The closest next of kin to the deceased is the deceased’s spouse’s (spouse deceased years ago) first cousin. The trust instructs the successor trustee to liquidate all assets and give the proceeds to charity. There is a vehicle titled in the deceased’s name, not the trust’s name. What should the successor trustee do to sell the vehicle? It sounds like the successor trustee can’t simply sign the title directly. I see that Michigan has a form TR-29 “Certification from the heir to a Vehicle”, could the successor trustee designate themselves as the heir and transfer ownership to the buyer? Or does the vehicle need to first go to the next of kin? Or is this situation complex enough that an attorney would be needed?
Ryan
it probably isn’t worth getting an attorney involved. That would cost more than the car is worth. Give the car to the first cousin. They are what are called laughing heirs. He or she will laugh when they get a car. the trustee can’t be made the heir. I think you are stuck with the cousin or a big probate. let me know what happens.
I am wanting to place all 3 of my cars under a revocable trust..all 3 are paid in full and one is an antique title. I am in Pa…Can you tell me what to do and the associated costs? My goal with these cars is to avoid probate at my death…or is there another option out there? Thank you!
David,
PA is odd in lots of things. I am not sure. Go to the DMV with the trust in hand and tell them you want to put the cars in the trust. They will help you or tell you where to go. I believe all states have a “work around” to avoid probate on a vehicle if it is left in a dead person’s name. Ask the DMV what theirs is or if they have one.
My dad is in an Oregon nursing facility and considered severely compromised mentally. I’m his only child and the successor trustee in his trust. I have POA that allows me to buy or sell. Can I have his vehicles transferred in to his trust or do I need guardianship first? Do I need a lawyer to transfer his vehicles or can I go through the DMV?
Suzanne
you should be able to do it at the DMV. YOu don’t need an attorney. you should have the Durable POA activated, and as agent, you could probably move the cars to the trust or just sell them.
Question: I have several vehicles all paid for, Can’t I simply sign the title that releases ownership and my kids can deal with them after I pass? Will they need to go to probate?
You could just sign the title, but that becomes a hot potato. If I get the title, I own the car. I’m not too worried about vehicles, because I am pretty sure all states DMV offices have a “work around” so the family can get title transferred without probate after the owner dies. Just buy your next car in the name of your living revocable trust. Many states will now let you transfer your vehicle title by gift or to a living revocable trust with just a minor fee. They used to all want a transfer sales tax type payment, but they have gotten better in the last 30 years as trusts have become more popular and understood. If your state is easy, then make the transfer the the living trust now.
My family living trust (in Florida) states that it owns all of my personal property including cars & boats. Would this avoid probate of all these items?
Geoffrey,
Simply stating that the trust owns everything will not work to avoid probate. The asset actually has to be titled in the name of the living revocable trust. Just making a blanket statement technically transfers ownership, but it doesn’t satisfy anybody when probate is on the table.
Geoffrey
It technically makes a transfer of the assets into the trust, but practically, it doesn’t avoid probate, because the people at the bank, etc don’t know the trust exists. the cars can have a work around at the DMV, so don’t sweat the vehicles. buy your next car in the name of the trust directly
I have a collector car worth about &70,000 Its registered in my name, my wife’s name, and daughters name who I want to inherit the car when I die.I want to protect it from the Nursing home if I end up in one before I die. I know they can make you sell assets to pay for your care. We did put our house in a irrevocable trust 6 years to protect it from the Nursing home. Im not ready to hand the car over to my daughter yet. What can I do to shield the car. My daughters in our will to get the car but that doesn’t protect it from possible Nursing home spend down. Thank you Brian