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The KRASA LAW, Inc. Estate Planning Blog

Friday, September 15, 2017

Death and the DMV

The Department of Motor Vehicles (“DMV”) has a reputation for layers of bureaucracy.  Indeed, many people might consider waiting in line at the DMV without an appointment as a “fate worse than death.”  As challenging as it can be to deal with certain aspects of the DMV, handling the transfer of a decedent’s vehicles in California can be surprisingly efficient.

If the decedent did not have a living trust and had other assets necessitating a probate, then the decedent’s vehicles will be subject to probate which will generally be a time-consuming and costly process.  However, if the decedent had a living trust, then the process of dealing with the DMV to transfer the vehicles to the beneficiaries can be painless.

Section 13050(b)(1) of the California Probate Code specifically states that vehicles registered with the California DMV cannot by themselves necessitate a probate.  Therefore, if the decedent’s other assets are either titled to a revocable living trust at the time of death or designate payment on death beneficiaries, the transfer of the decedent’s vehicles can be accomplished without court involvement.  

In such a case, the decedent’s successor trustee can fill out a California DMV form entitled, “Affidavit for Transfer Without Probate California Titled Vehicle or Vessels Only (REG 5),” which can be downloaded from the DMV website.  The successor trustee would take the form along with a certified copy of the decedent’s death certificate to the local DMV office to complete the transfer.  The rules specifically require a waiting period of 40 days after the death of the decedent.  

Although the transfer of a decedent’s vehicles is straightforward and simple when the decedent’s estate is not otherwise subject to probate, it is prudent for a trust-maker to transfer vehicles into a living trust as an extra measure to make sure that the successor trustee does not encounter any unexpected problems in transferring vehicles after death.  Vehicles can be transferred into a living trust either by assignment or by formal registration.

An “assignment” is a written document that transfers property.  An assignment of a vehicle can simply state: “I hereby transfer and assign all right, title, and interest presently owned and hereafter acquired in my 1953 Chevrolet Bel Air to John Smith, Trustee of the John Smith Living Trust, dated January 1, 2008.”  The assignment should be signed, dated, and sometimes notarized.  

Often items of tangible personal property that do not traditionally have titled ownership such as jewelry, clothing, household furniture, works of art, electronic equipment, and sporting goods are transferred to a revocable living trust through a “general assignment of personal property.”  In addition to listing the items of tangible personal property that do not have titled ownership, it is prudent to also include “vehicles” in the general assignment.   

Finally, including a list of vehicles on the trust’s schedule of assets (often referred to as a “Schedule A”) can be helpful.  Some comprehensive trusts might also include a “magic wand provision” that expresses the general intent to transfer all assets of any kind (which would include vehicles) into the trust.  

In addition, the California DMV allows vehicles to be formally registered to living trusts.  To complete the formal registration, the vehicle owner must sign the title over to the trust, fill out a “Statement of Facts (REG 256)” form, and bring both documents to the DMV.  A smog check might be required in order to complete the transfer.  Furthermore, for all vehicles that are formally registered to the living trust, the vehicles’ insurance policies should add the trust as an additional insured.

Because the transfer of vehicles upon death is relatively simple provided that none of the decedent’s other assets are subject to probate, and because technical transfer of vehicles to the trust through assignment is effective, it might not be worth the time, effort, and expense to formally register vehicles with the DMV as long as all other assets are either properly titled to the trust or have up-to-date beneficiary designations.    

While the DMV can be a frustrating maze during life, there might be some comfort in knowing that the rules for transfers of vehicles upon death can be painless if basic estate planning principles are followed.

KRASA LAW, Inc. is located at 704-D Forest Avenue, Pacific Grove, California 93950 and Kyle may be reached at 831-920-0205.

Disclaimer: This article is for general information only.  Reading this article does not establish an attorney-client relationship.  Before acting upon any of the information presented in this article, you should consult a competent attorney who is licensed to practice law in your community.    




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KRASA LAW assists clients with Estate Planning, Elder Law, Pet Trusts, Asset Protection, Special Needs Planning and Probate / Estate Administration in Pacific Grove, CA(93950), Monterey (93944, 93940, 93943, 93942), Salinas (93901, 93905, 93906, 93907), Hollister (95023,95023) Pebble Beach (93953), Carmel By The Sea (93921), Seaside (93955) and Carmel (93923, 93922) in Monterey County and San Benito California.

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