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What happens to my vehicle after my death?

On Behalf of | Jan 25, 2019 | Estate Planning

Minnesota law has recently been updated to allow people to name a beneficiary on the title of a motor vehicle. An owner of a motor vehicle can use a Transfer of Death (TOD) designation to transfer title to a motor vehicle to a beneficiary of the owner’s choosing after the owner’s death. A TOD beneficiary has no interest in the motor vehicle until the death of the owner(s). The owner(s) may therefore sell the vehicle or change the beneficiary designation at any time without the consent of any beneficiary. This is a powerful new tool for people to use to ensure that their assets pass to their loved ones in the most efficient way possible after their death.

It can be easy to overlook motor vehicles when planning for what happens to one’s assets upon one’s death because motor vehicles often depreciate in value. But, the value of motor vehicles can cause a person’s estate to go through probate, even if the plan for every other asset was set up to avoid probate. This can happen in many scenarios. For example: (1) A person saved up and bought a valuable vehicle in his/her own name that holds significant value at the time of death; (2) A person owns one or more collectible cars in his/her name alone at death that have significantly more value than what was paid for the vehicle due to the improvements over the years; and (3) a person owns a number of vehicles, boats, RV’s, etc. that, when added together, add significant value to a person’s estate.

Make sure to ask an estate planning attorney if naming a Transfer on Death Beneficiary makes sense for you in your situation.

Contact Attorney Heidi Van De Berg, or any of the other estate planning attorneys at Gries Lenhardt Allen P.L.L.P., to discuss if naming a beneficiary on a vehicle is right for you.