As one of our favorite holidays draws near, most Americans are excited to spend time with family, travel, and of course enjoy the inevitable feast and their favorite traditions. Since all of us at rateGenius are American (we all live in the Austin, Texas area), we're excited, too. What makes us unique, however, is that…
Losing a loved one is difficult enough emotionally, but the added stress of settling an estate can be grueling and overwhelming, in more ways than just emotional. If your passed loved one had a car, the process can be either simple or complex, depending on a number of factors.
Circumstances such as your state’s DMV and Probate laws, existence of a Will, presence of a lien on the vehicle, and listed owners on the vehicle’s title, lien, and registration all influence the fate of your loved one’s car. Whether you are responsible for managing the estate or not, it’s important to understand your rights and how these factors pertain to your loved one’s assets.
First and foremost, it’s always smart to contact credit bureaus and other lending institutions before sending copies of the death certificate, they will let you know what their procedures are, as a precaution to prevent fraud. Keep the original(s) for other requirements. In addition, you’ll need to research your loved one’s financial and legal documents to understand a number of matters, particularly whether there are any open liens, due payments, other asset owners or cosigners, and of course the presence of a will.
Most circumstances merit contacting a probate lawyer to ensure the estate is handled properly, as there are certainly different methods for closing estates with and without wills. If the car has a lien and friends or family members are interested in potentially keeping the car, it’s important to continue making payments on the car to avoid repossession – even if probate is not yet complete.
The probate process
Probate is simply the legal process that ensures the proper settlement of an estate. Contrary to popular understanding, probate occurs for both estates with and without wills, though cases with Wills tend to be much more straightforward.
In situations when probate takes longer, some assets may be ordered by the court to not change ownership until the completion of the probate process. However, sometimes when certain assets have liens, payments due, joint owners, or other characteristics, a judge may expedite those assets through probate, allowing them to change hands faster than the other assets in the estate.
Regardless, at the end of probate, any heirs should have the ability to finalize their new ownership with their lender, DMV, or Tax Assessor’s office, as each organization will request a copy of a final legal document (either a Will or a Testamentary) that details who is the Administrator or heir.
If there’s credit life insurance
Credit life insurance is an insurance policy that pays off a borrower’s debt in the event that he or she passes away. If your loved one had credit life insurance, it could make both the probate process much easier and could make the transfer of ownership of awarded assets much easier as well.
If there’s a lien
If the car you inherit or is awarded to you and if there is a lien and no credit life insurance was present, you will need to contact the lien-holder to determine next steps – regardless of whether the estate had a Will or a Testamentary. The new owner will need to qualify for a loan on his or her own. Based on your financial situation, the lien-holder could suggest a number of courses of action.
One option could be to simply continue making payments on your late loved one’s original loan. Another option is refinancing, either with the existing lender or with another lender. This is where rateGenius can assist you. We search our lender network for a new loan for you. If you accept the offer, we essentially take care of the rest – even working with your state’s DMV and your new lien-holder to change the title, ensuring an easy transition during a difficult phase.
Whether you refinance with us or not, you will need to provide either a will or a testamentary, the death certificate, and other standard documentation during the loan application phase. However, because we handle the remaining complexities, our customers don’t need to worry about much else.
Nevertheless, if you choose not to refinance with us, if you are not refinancing, or if you are simply curious, below we overview the basic course for transferring ownership after the passing of a loved one. Again, because each case is dependent on a variety of factors, there is no one single process
If there’s a will
If there is a will and you were awarded the vehicle, it could be relatively easy to officially change ownership. Of course, it’s always important to consult with your probate lawyer and your state’s DMV for the specifics. However, most states have generally similar requirements such as the death certificate (whether original or copy depends on your state), the will, other ownership and legal documents, and associated fees. Auto insurance needs to be transferred into your name as well.
If there’s no will
If there is no will, someone will need to be appointed by the probate court as the heir to the car. Unless the car is expedited through the probate process, it could take several months before it’s clear with the courts to officially change hands. When probate on the estate is finally closed, the court will draft a formal document called a Letter of Testamentary, which details the fate of each asset in the estate. If you are the awarded the car, you will also need to officially change ownership. The requirements for this type of ownership change are very similar to cases with wills, except the new owner will need to provide the Filed copy of the Letter of Testamentary as proof of heir-ship rather than a will.