How to Transfer Car Ownership After Death

Dealing with the legalities of transferring car ownership after the death of a loved one is a complex and emotionally challenging process. However, it is necessary whether you want to keep or sell the car.

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What happens to a vehicle when the owner dies?

When an individual passes away, their assets, including cars, become part of their estate. The estate then goes through a legal process known as probate, which involves distributing the deceased person's assets according to their will or, if there is no will, state intestacy laws.

Probate is the court-supervised process of validating a will and overseeing the distribution of assets. However, a vehicle may bypass probate, particularly if it is co-owned, has beneficiary designations, or if the estate qualifies for small estate exemptions.

Understanding the deceased's legal ownership of the car is the first step in transferring the title. The type of ownership will impact how the transfer of ownership proceeds. Below are some common ownership arrangements:

Sole ownership: If the deceased person was the sole owner of the vehicle, the car becomes part of the estate and must go through probate unless it qualifies for small estate procedures.
Joint ownership with right of survivorship: In this case, the surviving co-owner automatically becomes the full owner of the car, and probate is not necessary.
Transfer-on-death (TOD) or payable-on-death (POD) beneficiary: If the deceased designated a beneficiary on the car title, the vehicle would pass directly to that person without probate.

What happens if there is no will?

When a person dies without a will (intestate), state laws determine how their assets, including vehicles, are distributed. The probate court will appoint an administrator to manage the estate and distribute the assets according to the state's intestacy laws.

In such cases, the vehicle goes to the deceased's immediate relatives, including the spouse, children, or parents, depending on the state's rules of succession. The process may take longer without a will, as the court has to determine rightful heirs.

If there is no will, an Affidavit of Heirship may be required. This document is signed by someone familiar with the deceased's family and attests to the relationship between the heirs and the deceased.

What if the car is financed?

If the deceased was still making payments on the car loan at the time of their death, the vehicle is still technically owned by the lender. The remaining loan balance must be paid before the car can be transferred to a new owner. The executor or estate is responsible for ensuring the loan is paid, either from the estate's assets or by selling the vehicle.

Sometimes, the lender can allow the heirs to take over the loan and continue making payments. The lender may require them to refinance the loan in their name.

Steps to transferring car ownership after the owner's death

It's often a challenge for loved ones to figure out what to do next after a person passes away. Here are a few steps you will need to take to transfer the title.

Locate the car title

The first step is locating the car's title, also known as the "certificate of title." This is a legal document that identifies the owner of the vehicle. If the title cannot be found among the deceased's belongings, you can request a duplicate title from the local Department of Motor Vehicles (DMV) or the equivalent agency in your state. In some cases, the car title may already list a co-owner or beneficiary, which could make the transfer process easier and avoid probate.

Check for joint ownership or beneficiary designation

Check the title for joint ownership with survivorship rights or any beneficiary designation. Suppose the deceased jointly owned the car with a spouse or another party. In that case, the car automatically passes to the surviving co-owner, assuming they had the "right of survivorship" indicated on the title.

Additionally, some states allow owners to designate a beneficiary who will automatically inherit the car upon death through a transfer-on-death (TOD) or payable-on-death (POD) designation.

Joint ownership: The surviving owner can transfer the title to their name at the DMV by providing proof of death (such as a death certificate) and showing identification.
Beneficiary designation: The transfer is usually straightforward if there is a TOD or POD beneficiary. The beneficiary will present identification and a death certificate to retitle the vehicle in their name.

Determine if the car should go through probate

If the deceased solely owned the car and there is no beneficiary, it will go through probate before you can transfer ownership. In probate, the executor of the estate, named in the will, is responsible for distributing the deceased's assets, including cars, in accordance with the will.

The vehicle can only be transferred once the probate process has been completed and the court grants the executor authority to distribute the assets. If the estate qualifies for small estate administration, the car transfer may be faster and simpler.

What is a small estate affidavit?

A small estate affidavit is a legal document that allows the transfer of assets from a deceased person's estate without needing a formal probate process. It is used when the total value of the deceased's estate falls below a threshold set by state law.

It is a simpler and faster way to distribute assets to beneficiaries and avoid the expensive probate process. The threshold for the small estate varies by state, so you should confirm for your state. For instance, a small estate in California is considered less than $184,500, and $75,000 in Texas.

Obtain the necessary documents

Several documents will be required to transfer the car title after death. These documents may vary depending on state laws but generally include the following:

Death certificate: A copy of the deceased's death certificate is required.
The will or probate documents: If the vehicle is going through probate, you will need proof of your legal right to transfer the car title, such as a will or testamentary letters issued by the probate court.
Affidavit of Heirship: If there is no will, some states may require an Affidavit of Heirship to prove the rightful heir to the car.
Odometer disclosure statement: In most states, you must provide an odometer disclosure form if the vehicle is less than ten years old.
Proof of insurance: The new owner must show proof of insurance before completing the title transfer.

Visit the DMV

Once you have gathered all necessary documents, visit the DMV (or equivalent agency in your state) to complete the title transfer. The DMV will review your documents and process the title change. Remember, each state has different requirements for transferring car ownership after death, so check with your local DMV for specific guidelines.

Pay associated fees and taxes

In most states, you will need to pay fees and any applicable taxes to transfer the vehicle's title. These fees vary by state and may include title transfer fees, registration fees, and sales tax. Some states offer exemptions or reduced tax rates if the car is transferred to a family member or heir.

Can you continue using a deceased person's car without a transfer of ownership?

No. You should not continue using a deceased person's car without transferring ownership, as doing so can lead to legal, insurance, and financial issues. Since the insurance policy becomes void upon the policyholder's death, you could get in trouble for driving an uninsured vehicle.

Some states also have specific timeframes for transferring car ownership after death. In California, for instance, you have 30 to 60 days to transfer car ownership, and failure to do so will attract fines and penalties.

Final thought

Transferring car ownership after death can be a complex task that involves legal and administrative steps. Whether the vehicle is part of probate or can be transferred through joint ownership or beneficiary designations, following the right procedures will ensure the car is legally transferred to its new owner.