Because of the simplification of estate tax planning and the rise in probate avoidance techniques, we are finding that, for many, the only asset that is governed by a decedent’s Will is their car.
Traditionally, the decedent’s family would have to open a small estate to transfer title to the vehicle. However, this can be cumbersome and time-consuming if an automobile is the only reason someone has to open an estate.
Thankfully, the Maryland General Assembly and MVA have implemented policies to simplify the transfers of vehicles at death.
Beneficiary Designations
The MVA allows for car owners to add a beneficiary designation on their vehicle. Because beneficiary designated property passes without the need for probate, if a car with a beneficiary designation associated with it is the only asset of a decedent’s estate, there would be no need to open a small estate.
To add a beneficiary designation to your vehicle, you can go to this website and fill out the online form. The MVA will then issue a new title. After death, your beneficiary can then use the new title and the death certificate to complete the transfer.
Once you have added a beneficiary, you can remove him or her or change the beneficiary at any time, but you would need to obtain a new title each time.
Please see this informational site for more details.
Joint Titling
Joint titling is often the simplest method to ensure automobiles can pass to your intended beneficiary without passing under your Will. If two individuals own a car together, at death, it automatically passes to the survivor without going through the probate process (although a new title must be issued).
Arguably, this method increases the liability exposure for the other party as plaintiffs often sue all owners of a vehicle involved in an accident. You should seek legal advice before adding anyone to the title of your car to make sure you understand the potential benefits and consequences.
Motor Vehicle Exemption for Surviving Spouses
Under certain circumstances, surviving spouses can obtain the title of a car owned by a deceased spouse without the need for probate. The car must be free of liens, the estate must have no other debts, and the surviving spouse must be the sole heir or legatee of the estate. While this is an available option that we advise our clients of, we have found that this is not commonly used and can often cause confusion at the MVA or Tag & Title companies.