Should You Put Your Car into Your Trust?
One question we get quite often is whether an automobile or other vehicle should be held in your trust. The answer to that depends on what type of trust you have.
Vehicles, such as cars, motorhomes, boats, motorcycles, etc. each have a title and are therefore potentially subject to probate after your death. While some states will allow a certain number of vehicles or a certain value of vehicles to avoid probate. If you exceed that number or that value your family may need to initiate a probate to transfer the vehicles after your death. The safest path to avoiding probate is to transfer title to your trust, if your trust is a revocable living trust. If you have an irrevocable trust, that may not be the best place to own the vehicle.
I often hear that putting a car into a living trust exposes other trust assets to liabilities that may arise from an accident. The reality is that a living trust does not provide asset protection, so holding the vehicle in the living trust is the same as owning in your personal name if you get in an accident. If you have an irrevocable trust, on the other hand, that type of trust often does provide a level of asset protection and therefore you should only make that change after discussing it with your attorney.
If you decide to transfer your car or other vehicle to a trust you should keep a couple of things in mind:
Many states will charge you to make the transfer from your individual name to the trust.
There may not be enough room to put the full trust name on the title so you may need to abbreviate. When doing so you should make sure that the abbreviation is unambiguous, and it is clear who the owner is.
You should update your insurance carrier as to the current owner and make sure there are no concerns with coverage.
The best way to avoid probate is making sure that assets are owned appropriately. But different assets have different concerns. So, it is always important to discuss your unique situation with a qualified estate planning attorney
This post is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Nothing herein creates an attorney-client relationship between Hallock & Hallock and the reader.