As an estate planning attorney in Arizona I am always asked if after you have signed your revocable living trust, what if anything should you do about your vehicles or other assets titled through Arizona’s Motor Vehicle Division?
First of all, let me remind you, if you have a revocable living trust, the “funding” of your trust (which means transferring title of your assets to the trust) should be given the highest priority. Without proper funding, your trust and overall estate plan may not work as you have originally anticipated and intended.
Part of the funding process is deciding what to do with your vehicles or other assets that are titled through Arizona’s Motor Vehicle Department. In Arizona you have 3 viable options when dealing with MVD titled assets:
- Do nothing: Some people prefer not to transfer title of their vehicles into their trust, leaving title in the original owner(s) name. Arizona’s small estate statute (A.R.S. § 14-3971), allows for the transfer of vehicles to the decedent’s successor upon the presentation of an Affidavit after death. If you have a revocable living trust you should also have a pour-over last will and testament, which will enable the Trustee of the Trust to simply collect title through this process after the death of the owner, usually without a full probate. Although popular, this is not my recommended solution to your vehicles and estate plan.
- Transfer Title to Your Trust: Other people prefer to actually transfer title of their vehicles into their Trust during their lifetime. This requires the owner to go to MVD or to an authorized third party with their original title and obtain a new title in the name of the trust. Additionally, if the vehicle has a lien on it, you will not possess the title and thus will need to wait until you have paid off the vehicle and obtain the title prior to making this transfer.
- MVD Beneficiary Designation: Arizona has recently passed a new law (A.R.S. § 14-28-2055) which allows vehicle owners to designate one beneficiary or multiple beneficiaries as owner of the vehicle, effective upon the death of the original owner. This method can be used to list either the Trust as the designated beneficiary or an individual(s). Using this process to transfer title, which keeps the vehicle out of probate, requires the owner to take the original title down to MVD and attach a fully signed and executed Beneficiary Designation and then attaching such Beneficiary Designation to the original title. This option is only available if the vehicle is owned by just one person.
Vehicles and other assets titled through MVD are an important part of one’s estate and must be properly acknowledge and dealt with. Although people in Arizona have multiple options on how to deal with their vehicles, each option should be evaluated and contemplated in order to determine which one works best for you and your personal situation.
In short, as with most legal matters, it is vital that each person talks with their qualified estate planning professional on a regular basis to discuss the funding of their trust to make sure that their estate plan works as anticipated and intended.
If you have any questions regarding family based estate planning or any other legal issues, please do not hesitate to call the attorneys at Rowley Chapman & Barney, Ltd., by calling (480) 833-1113.
Attorney Profile: Kenneth Barney, Estate Planning
Email: [email protected]
Phone: (480) 833-1113
Main Areas of Law:
Estate Planning – Wills, Trusts & More
Probate in Arizona
Blog: Ken Barney’s articles