The executor of a British estate was recently caught transferring the deceased’s car, worth about $1,240, to his own stepdaughter for the private use of her and her boyfriend. The fraud became public knowledge when the couple broke up and the boyfriend subsequently told his friends, who in turn informed the executor’s employers, a local law firm. John Patson, the executor in question, received a suspended four-month jail sentence from a local magistrate in the English town of Ipswich.
This odd little tale may lead you to ask what will happen to your car after you’re gone. The California Department of Motor Vehicles regulates all automobile transfers and sales in the state and there are specific procedures for probate and non-probate transfers following an owner’s death.
Transfers Without Probate
In many cases a deceased individual’s vehicle can be transferred to a successor in interest without going through the formal probate process. DMV rules allow for such transfers when the total value of the deceased’s property (real and personal) located in California does not exceed $150,000 and at least 40 days have passed since the person’s death. (If the vehicle’s existing registration will expire before the 40-day waiting period, renewal fees must still be paid to avoid penalties.) The heir can transfer title to any California-registered vehicle by filing an affidavit with the DMV.
The affidavit states there is no probate proceeding involving the deceased person’s property in California and that there no creditors of the deceased who have not been paid. If the vehicle had two or more deceased co-owners, the affidavit need only be filed on behalf of the most recently deceased co-owner. The successor in interest must, however, file copies of death certificates for all vehicle owners together with the affidavit. The successor must also sign the vehicle’s certificate of title on behalf of the deceased owner, e.g. “Danielle Smith by Mary Smith.”
If the value of the estate exceeds $150,000.00, title to the vehicle must be transfered through the probate process.
Transfers Under Probate
If the vehicle owner dies without a will, an heir or other interested party may apply to the probate court for letters of administration. This opens a formal estate whereby the court appoints an administrator to dispose of the estate’s property. In lieu of the affidavit discussed above, an administrator can assume title to a deceased person’s vehicle by presenting his or her letters of administration to the DMV and signing the title as “Mary Smith, Administrator of the Estate of Danielle Smith.”
When the deceased leaves a will and nominates an executor, the probate court will issue letters testamentary, which function the same as letters of administration. The only difference here is that the vehicle title is signed, “Mary Smith, Executor of the Estate of Danielle Smith.” If the estate is opened in another state, the California DMV will accept letters issued by that state for purposes of transferring title to California-registered vehicles. Likewise, an administrator or executor appointed in California would need to re-register vehicles registered in other states with the local motor vehicle departments.
Transfers On Death
Alternatively, a vehicle owner may designate a transfer on death beneficiary during his or her lifetime. Unlike a probate or non-probate transfer, a TOD beneficiary is listed on the vehicle title as such. The DMV only permits a sole owner to name a single TOD beneficiary, which may be an individual, corporation, trust or other legal entity. The owner must complete a new title listing himself or herself along with the TOD beneficiary. (The owner can revoke or change the beneficiary designation at any time.) After the owner’s death, the TOD beneficiary then applies to the DMV for a duplicate title.
Whether you dispose of your car through a will, trust or beneficiary designation, it’s important to treat your vehicles as a critical part of your estate planning. If you’re in the San Diego area and would like to speak with an experienced San Diego probate attorney, contact the Law Office of Scott C. Soady at 1-877-435-7411 today.