Philip J. Ruce, estate planning director at Stone Arch Law Office, leads a team providing peace of mind to families. With a background in trust and estate administration, Philip pursued further education at University of Minnesota, William Mitchell College of Law, and Thomas Jefferson School of Law.
All assets of the deceased typically need to go through probate to be properly divided among the rightful beneficiaries. This includes their home, bank accounts, insurance policies, and even vehicles. If you’re wondering, does a car have to go through probate, the answer is generally yes—unless specific measures are taken to avoid it. Even if the deceased names a beneficiary for the car in their will, the document must still go through probate for the court to oversee the division.
However, it is possible to avoid putting a car or other assets through probate by implementing an estate plan designed to transfer assets directly upon death without court involvement. For instance, a revocable trust can ensure that assets, including vehicles, bypass probate entirely.
For more guidance on navigating the probate process and understanding your options, consult with a Minneapolis Probate Attorney. Proper planning can save time, reduce stress, and ensure your loved ones receive their inheritance without unnecessary delays.
What Happens in a Revocable Trust?
A revocable trust is a flexible and effective estate planning tool in which properties and assets are placed into a family-controlled entity. By proactively transferring ownership of assets into a revocable trust, the grantor ensures that these assets will be automatically passed to the trust’s beneficiaries upon their death, without the need for a judge or the probate process. This streamlined approach not only saves time but also keeps asset transfers private and out of the public record.
Nearly any type of asset can be included in a revocable trust, from financial accounts to physical property. Even significant items like a house or a car can be transferred into the trust and governed by its private terms.
However, not all assets are suitable for every type of trust. If you’re considering using a different type of trust, such as an irrevocable trust, it’s important to understand which assets make sense to transfer. Learn more about what assets should be placed into an irrevocable trust to make informed decisions about safeguarding your estate.
By placing assets into a revocable trust, you retain control during your lifetime while ensuring a seamless transition of ownership after your passing. This makes it an essential component of a comprehensive estate plan.
Do You Need a Revocable Trust for Your Car to Avoid Probate?
While a revocable trust is an effective way to avoid probate, not every estate requires such measures. Under current estate law, estates valued at $75,000 or less are granted a leeway. If the total value of the deceased’s estate does not exceed this threshold, the beneficiaries can collect and distribute the assets without going through probate. This process is handled through an affidavit of collection, making it simpler and more cost-effective.
However, it’s important to understand how revocable trusts function over time and whether they might eventually become irrevocable under certain circumstances. Proper planning ensures that your estate plan is aligned with your specific needs and goals.
What is an Affidavit of Collection?
An affidavit of collection is a document where the beneficiaries make a statement that they can transfer the property to themselves without a need for probate. It’s a sworn statement saying that there are no other assets owned by the deceased that add up to more than $75,000.
These assets that are valued less than the cap will be transferred according to intestacy statutes, which means that they will usually go to the spouse and children of the deceased.
The affidavit of collection is a good way to avoid probate and immediately transfer a car to the people set forth by laws on intestacy. However, if the deceased has assets more than $75,000, they need to look into other estate planning tools.
Choosing the right trustee is crucial for effective trust management. They should be responsible, impartial, and financially savvy. While you can name a family member or individual who is named as a beneficiary of a trust, it can create impartiality and administrative challenges.
Revocable living trusts avoid the costs and time associated with the probate process. They’re also private documents, unlike wills filed with courts. They can be more easily amended as circumstances change. However, with a revocable living trust, beneficiaries may not have the needed cash flow at death and the trust will only protect the assets that have been transferred to it.
