All assets of the deceased need to go through probate in order to be properly divided among the rightful beneficiaries. This includes their house, money, insurance, and even cars that they own. Even if the deceased names a beneficiary for the car in the will, the document still has to go through probate for the division to be overseen by the court.
However, there is a way to avoid putting a car or other assets through probate. That is by adopting an estate plan that transfers assets upon death without the need for court processes and orders. One such manner is via a revocable trust estate plan.
What Happens in a Revocable Trust?
A revocable trust is a form of estate plan where the properties and assets are all placed in a family entity. A person proactively puts everything in a revocable trust and these assets will automatically be owned by the trust beneficiaries upon death without the need for a judge or for the probate process. Even a house or a car can be put into a revocable trust and be governed by the private trust agreement.
Do You Need a Revocable Trust for Your Car to Avoid Probate?
While a revocable trust is a good way to avoid probate, not every estate needs to go that far. Every person is granted a leeway in estate law. As of writing, the leeway is $75,000 or less. If the estate of the deceased does not exceed this amount, the beneficiaries can collect and distribute that estate according to intestacy statutes. This is done through an affidavit of collection.
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.