Car title rules that can drive you crazy

A few weeks back I wrote about the importance of getting your estate documents in order. If you missed it, check it out here... 

One of the things I mentioned was getting your property titled correctly. It is very common to have trouble changing the ownership of property, even if held jointly, upon the death of one of the parties.

Case in point: When we bought my new car a few years ago, we had the titled issued in both my husband's and my name. We had also requested to add, the right of survivorship option. This ensured that if either of us passed away, the ownership of the vehicle would transfer over to the survivor's name. Sounds easy enough, right? I thought so too...

After his death I spoke with my insurance guy who suggested I remove his name from the vehicle insurance policy. This would make it easier in the event of damage to the vehicle, leaving the check issued from the insurance company in my name only. I agreed.

All was trucking along pretty well, or as well as someone who just lost their husband could be expected, until I went to renew my tags. Here's where I got the brakes slammed on...

You may not be able to register your vehicle

I was denied my vehicle renewal... Why? His name was still on the title, however was no longer on the insurance policy. The fix? Purchase a temporary (30 day) registration for $25, contact the bank to request they send me the title, bring it to the title office, have them change the title to read just my name, and after that, and only that, could they renew my tags for the year. WTH?!?

Frustrated, and $25 lighter in my wallet, I left the title office on my quest to contact the bank for the title on a vehicle that still held a loan. 

It was not a shock to me that they weren't too accommodating. After what seemed like hours on the phone, being shuffled between various departments, and only hearing what sounded very similar to the teacher from the Peanuts cartoon, saying something about "blah blah, legal, blah, payoff, blah blah", I made the decision to keep what patience I had left and end the conversation.

You may be charged additional fees

Being in a position to make the last three payments and have the clear title mailed to me, I opted for this choice. Of course it took a few weeks, and another $25 temporary registration before I received the golden ticket (title), but once received things went pretty smoothly. 

However, if I weren't in this position, say by owing more than I had sitting in my checking account, things could have turned out much differently.  

My next fear was renewing the registration on my son's vehicle. This title was only in my late husband's name. While I had the clear title in hand, and a few months until the due date, I decided to begin the process. I can honestly say this next part was possibly only slightly less painful than childbirth...

I returned to the title office, with not only the clear title, but also the death certificate, last will and testament, and my insurance card to see what could be done. Since this title did not have the right of survivorship listed on the front of the title, I wasn't sure what additional paperwork would be required. To my surprise, it was a quite a bit more...

Know the forms

Even though my late husband's last will clearly stated that everything was left to me, the title could not be transferred to my name without a few other documents. Namely, I would need to have his two daughters, who live in Germany, sign and have notarized, an Affidavit of Heirship (TX Form VTR-262). 

Since the document is in English, I explained this would not be possible. The title guru then suggested I go through probate, which would take time and money, neither of which I was too happy about. 

Then I remembered a whole bunch of paperwork I had at of which ended up being a Rights of Survivorship Ownership Agreement (TX Form VTR-122). After running home and grabbing the form, the title was reissued in a matter of minutes. 

No sending paperwork to Germany, no notary, no probate, no temporary tags, and no fuss. While I'm not sure what other states may require, Texas only needs this form to transfer ownership of your vehicle to someone in the event of your death. Well, this form and the title.

No filing required

The best part is that you don't actually have to file it! Simply print the form, sign it, and keep it with your other estate documents. Even better, when leaving the vehicle to a spouse, a notary public signature and stamp is not required. So if you still have a loan on vehicle, you are able to complete this form and stash it away with your important paperwork. 

Your options

My suggestion: If your spouse dies, do NOT remove their name from the insurance policy until you give yourself plenty of time to work with the financial institution to complete the title work. This is especially true if your registration is about to come due in the next few months.

So before you get stuck paying for unnecessary temporary tags, tag this form on your to-do list as soon as possible. You'll be happy you did!

Follow all of my updates by signing up on the "Follow by Email" area on the left...

Want to see more ideas about saving money? Check out my other posts on The Money Diet, and follow me on Facebook.

No comments:

Post a Comment