How do I keep my car/vehicle out of probate court?
Updated: Sep 8, 2022
Less than half of the states in the U.S. have a probate-avoidance option for vehicles. In Arizona, if you own a vehicle, you may choose who you want that vehicle ownership to transfer to when you pass away. The vehicle does not have to be paid in full to make this designation; however, the beneficiary would not be able to fully transfer the vehicle into his or her name until any liens against the vehicle are paid in full.
The process is simple: Complete a FREE ADOT Motor Vehicle Division Beneficiary Designation form, have it notarized, and then put the form in a safe place where your beneficiary and/or the executor of your estate can access it. Upon your death, the beneficiary can then (1) attach your executed/notarized beneficiary designation form to the vehicle title, (2) take it to the Arizona Motor Vehicle Division, and (3) the MVD will then create a new title for the vehicle in your beneficiary's name. It truly is that simple!
Now, there are a few additional matters to take into consideration:
Community Property: Since Arizona is a community property state, your spouse may have an ownership interest in your vehicle even if his or her name is not on the title. In this situation, your spouse's consent may be required before your designated beneficiary can take ownership. To get around this, you can prepare a basic consent agreement, have signed by your spouse, and then put it with the MVD beneficiary form and title.
Co-Ownership: The MVD beneficiary form is intended for use when a vehicle is owned by only one person. If the vehicle is jointly owned with another person, the beneficiary will inherit the vehicle only after both you and the other owner have died. To make this process as simple as possible, the co-owners can each fill out MVD beneficiary forms, leaving the vehicle to the same beneficiary(ies). This way, when the first co-owner dies, the remaining surviving co-owner will retain ownership, but when the surviving co-owner dies, the ownership interest will be easily transferable to the agreed-upon beneficiary.
Multiple Beneficiaries: When you wish to leave your vehicle to more than one person, you can do so by naming all of the designated beneficiaries on the MVD beneficiary form. You then have an additional section in the form to complete where you will designate the legal ownership interest that your beneficiaries will receive the title as.
If you wish for your beneficiaries to receive your vehicle as joint tenancy so that any one of the owners has full authority to transfer ownership, license plates, etc., you may fill in "OR" under the Legal Status column.
If you wish for your beneficiaries to receive your vehicle as tenancy in common so that signatures of all parties are required for transactions involving the vehicle, you may fill in "AND" under the Legal Status column. With this option, bear in mind that if a beneficiary dies, the vehicle may end up in probate.
And if you wish for your beneficiaries to receive your vehicle as joint tenancy with right of survivorship so that signatures of all parties are required for transactions involving the vehicle, but when a party dies, the survivor only has to show proof of his or her death to then sign alone, then you may fill in "AND/OR" under the Legal Status column.
There are other options available for protecting your assets, such as setting up a revocable living trust, designating beneficiaries on bank accounts, recording a beneficiary deed, etc. Estate planning does not need to be expensive or complicated.
If you would like to discuss your options, contact Glover Court Solutions & Estate Planning. We are happy to offer FREE, no obligation consultations, reviews of your current estate plans, and case evaluations, and while, we cannot give legal advice, we can provide general legal information to help you navigate your legal matter(s). We also network with dozens of qualified attorneys throughout the Valley whom we would be happy to refer you to in the unlikely event we are unable to help.