Titling a Car

A common question during the Estate Planning process is whether or not a vehicle should be titled in the name of a Trust.. Luckily, a more detailed explanation of the nuances of such a decision can help provide some guidance.

Retitling a vehicle into a Trust typically involves having a new vehicle title issued in the name of the Trust, with that name appearing on the vehicle’s title. This also allows for the vehicle to be sold quickly, and applies to both Missouri and Kansas. A Trustee or Beneficiary would not have to wait until the assets of a deceased loved one are distributed before selling. A common misconception about titling a vehicle in the name of a Trust is that doing so will protect that vehicle from potential creditors. In reality, transferring assets to a Trust has very little affect on a creditor’s ability to access Trust assets to satisfy a claim or pay off a debt that is owed. It is important to note that while transferring a vehicle’s title to a Trust is one way of keeping that vehicle out of probate, it is not the sole means of doing so in many cases. Missouri and Kansas also allow an individual to designate a beneficiary or to include a transfer-on-death (TOD) designation on a vehicle’s title. This allows for ownership to pass automatically and avoids the probating of that vehicle altogether.

Our recommendation is to have a good estate plan, but don’t stress too much about the car. When you buy a new car, particularly if you are a Missouri resident, go ahead and name a TOD beneficiary or title it in the Trust. The TOD beneficiary can even be your Trust. Your current car is probably okay. If you are a collector, have a more expensive vehicle or an RV, it is always a good idea to title in the Trust or add a TOD at the DMV.