TOD registration or probate? How to keep you car from collecting dust after you die
What will happen with your car when you die? Will it sit in some driveway for months, collecting dust and losing value while your estate goes through probate? Not if you’re proactive, at least in California. As one of about a dozen legislatures countrywide, the Golden State allows residents to add a transfer on death (TOD) beneficiary to a vehicle’s title. After your death, this person will automatically own your car — and hopefully drive it.
A couple of characteristics make TOD car registrations appealing. The most important thing to know is that TOD beneficiaries are not registered owners, meaning you are free to sell or give away your vehicle without asking the beneficiary for his or her signature or even consent. You can also, at any time, change your mind about who should inherit your car, or revoke the TOD stipulation altogether. (Be warned, however, that your only option for doing so is by applying for a new certificate of ownership. Naming a different person in your will or trust will have no bearing on the provision in the title.)
The law in California limits the number of names that may be included in a TOD registration to two: Only one registered owner and one designated TOD beneficiary may show on the title, though the beneficiary can be an individual, a corporation, trust or partnership, or an association or another entity. A word of caution here: If you are married and the title of your car shows you as its sole owner, you may want to secure your spouse’s written consent before naming a third person as the beneficiary. Why? Because California is a community property state where assets that were purchased during a marriage belong to both spouses in a 50-50 fashion.
So, what happens with your car after your death? As mentioned earlier, your beneficiary automatically owns your vehicle (and any liens on it.) She can retitle it by submitting an application for a new title and a Statement of Facts form stating the date and place of your death and that she is entitled to the vehicle as the designated beneficiary. And she can drive the car while your estate goes through probate, which, in California, can take anywhere from 9 months to one and a half years.
By Kevin J. Moore