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Estate planning ensures proper handling of your assets after you are gone. When it comes to wills, the probate process occurs before your executor can distribute assets.

One question that often arises is whether vehicles go through probate, which can be a complex process depending on the circumstances.

The probate process

Probate is the legal process of distributing a deceased person’s assets. This involves settling debts and dispersing the remaining estate among the heirs. While real property and personal belongings are commonly part of the probate process, vehicles fall into a unique category.

Vehicles and estate planning

In most cases, vehicles are not probated in the same way as other assets. Instead, they are subject to a distinct procedure that varies depending on the ownership structure and applicable state laws.

Joint ownership

If the deceased person owned the vehicle jointly with another individual, the surviving joint owner usually becomes the sole owner automatically. This process, known as “right of survivorship,” bypasses probate and facilitates a smooth transition of vehicle ownership.

Transfer on death designation

Some states allow individuals to designate a beneficiary for their vehicles through a transfer on death designation. This allows the named beneficiary to inherit the vehicle without it passing through probate. It is a straightforward method that simplifies the transfer of ownership.

Sole ownership

In cases where the deceased person was the sole owner of the vehicle, the process may involve a small estate affidavit or a simplified probate procedure, depending on the total value of the estate. This allows for a quicker and less complex resolution.

Considerations and exceptions

It is important to note that certain factors, such as outstanding loans on the vehicle, can complicate the process. In such cases, it is necessary to settle the outstanding balance before the transfer of ownership.

As reported by Forbes, 91.7% of American households had one vehicle in their possession in 2021. If you are one of these vehicle owners, proper estate planning ensures heirs receive assets according to your wishes.