What is Estate Planning?
Estate planning is when a person arranges the management and disposal of their assets for when they pass away or at disability. Estate planning reduces the uncertainties of the probate process and maximizes the value of the estate by reducing taxes and other expenses. An estate consists of the assets you own at the time of your death or disability. For example, bank accounts, real estate, stock and securities, life insurance policies, and personal property such as automobiles.
What are the Options for Car Ownership?
Car ownership should always be considered when thinking of estate planning. There are different options to how a person should approach dealing with their vehicle and an estate plan. For example, a joint title of the vehicle or a complete transfer of the vehicle’s title prior to death or disability can help keep the vehicle out of probate later on. Probate can be a long and stressful process. Vehicles are considered depreciating assets, so keeping the vehicle out of probate would be beneficial to avoid waste. Probate occurs after a person passes or becomes disabled; their assets are put on hold until the will is validated, any remaining debt is paid off, and the beneficiaries of the will are identified.
What Happens if You do or do not have a Will?
On the other hand, if the car title stays in the name of a person who dies without a will, their heir can apply for a new title certificate with the Department of Highway Safety and Motor Vehicles. As stated above, this can become a hassle if the vehicle goes through probate. However, the application is simple if the applicant files an affidavit to the department that the estate is not indebted and the surviving spouse and their heirs all agree among themselves upon the division of the estate. In contrast, if the previous owner passed away with a will, a copy of the will must accompany the application. Depending on whether the will has been admitted into probate, either a certified copy from the probate court and an affidavit that the estate has enough funds or assets to pay all debts or a sworn copy of the will and an affidavit that the estate is not indebted is required.