Should I Put My Car in My Trust?

What is Funding a Trust?

A common estate planning goal is to avoid probate. If that’s one of your goals, then you’re likely looking at creating a trust. When you create a trust there are steps you must take for the instrument to be effective. One of those steps is called “funding your trust”.

“Funding a trust” is basically putting the asset into the trust, so that the trust controls where the asset goes after you pass away. Assets are put into the trust by changing the name on the asset’s title. For example, if you own real estate, you likely do so in your own name. If you want to double check all you need is to read the deed. The deed is the document that shows who has ownership, or title, of the property. Other assets that have a title, which needs to be changed to the name of your trust in order for it to be effective, are your bank accounts, retirement accounts, and brokerage accounts.

Should I Fund All My Assets Into My Trust?

While it is definitely best to fund your trust with all the assets you want to pass on, there is one type of asset you probably shouldn’t fund: your personal vehicles.

There are thousands of car accidents every day. And even if most of those accidents get resolved through insurance, it doesn’t change the fact that a car accident is one of the most likely reasons you’d get sued.

Why You Shouldn't Put Your Vehicles In Your Trust

When plaintiff’s attorneys are deciding whether to sue and who to sue, there is an incentive to find a “deep pocket” (i.e. someone with a lot of money.) From their perspective, this is important to make sure that their client will receive any funds a judgment states they are entitled to. No point in spending all that time and effort in court just to end up with a judgment that can’t be satisfied.

Let’s say you get into a car accident. When a plaintiff’s attorney is reviewing the other driver’s case, what conclusion do you think this attorney will jump to upon learning your car is owned by a trust?

That’s right. They’re probably thinking “Ka-ching! Found my deep pocket!” Now you’re getting sued and you might not even have the amount the plaintiff’s attorney was looking for.

So, that’s one reason to avoid funding your personal vehicles into your trust: it might attract lawsuits.

How to Transfer Your Personal Vehicle Outside of Probate

So how do you pass your personal vehicles outside of probate? Well, if you’re in Florida, you’re in luck! You do not need a probate order to transfer the title of the vehicle of a deceased person. Well, there are some rules around this.

First, the vehicle must be a personal vehicle of the deceased person or one of the deceased person’s family members.

Second, the surviving spouse, if any, and the heirs must all agree on how the vehicle will be distributed.

Third, you’ll need to provide a copy of the will, if any, even if it is not being probated.

Finally, the estate of the deceased person must not be indebted.

You’ll also need to complete some paperwork and provide some documentation, like the current registration and a death certificate.

Tell TealAcre to Tackle the Task!

The road to hell is paved with good intentions! Don’t let a simple oversight derail everything. Set yourself up for success with TealAcre. To get started you can:

Schedule a complimentary 15-minute consultation by clicking here.

Register for our next webinar by clicking here.

To check out our social media, click here.

To sign up for our newsletter & receive exclusive offers, articles, and insights, click here.