04 Apr What Is A Transfer-On-Death Title?
Estate planning provides a variety of options for passing assets on to heirs. Some people choose to utilize their last will and testament when leaving an inheritance. Others place assets in a living trust. There are benefits and drawbacks to using each document, but when it comes to passing down vehicles, the best document to create is a transfer-on-death title.
What is a transfer-on-death title?
A transfer-on-death title is a legal document. It uses beneficiary designations to pass the legal ownership of a vehicle from one person to another. Beneficiary designations pass an asset to a listed person, known as the beneficiary, when the original owner of the asset dies.
How do you create a transfer-on-death title?
The key to creating a transfer-on-death title is utilizing your vehicle’s certificate of title. Nebraska requires all vehicles driven on highways and roads to have a certificate of title unless otherwise specified. The owner of a vehicle obtains a certificate of title by filling out an Application for Certificate of Title after purchasing a vehicle. This document, which is available on the DMV’s website, serves as proof of ownership. The document includes a space for the vehicle’s owner to provide beneficiary designations. You can list up to two people as beneficiaries on the title. You also have the option to list a trust as a beneficiary.
What are the benefits of listing a beneficiary on the title?
Listing a beneficiary on a transfer-on-death title provides a variety of benefits. For example, listing a beneficiary on the title enables you to clearly dictate who you’d like to receive your vehicle when you die. This provides the benefit of making your last wishes well-known. It can also help prevent fighting among you heirs because it’s very difficult to argue over who should’ve received the vehicle when you die if there’s a beneficiary listed on the title.
Avoiding probate is the second benefit to creating a time-of-death title. The courts use probate to settle an individual’s estate when they die. Probate documents are public knowledge, so if privacy is a concern, you want to avoid the probate process, which beneficiary designations enable you to do.
For example:
John Doe owns a corvette. When he filed out his Application for Certificate of Title, he listed his grandson as the beneficiary. Two of John’s nephews were also interested in inheriting the vehicle, but it goes to his grandson because he was clearly listed on the title. John’s beneficiary designation helped avoid family warfare. His grandson and nephews cannot easily start a legal fight over the vehicle since John has made the inheritance decision in advance.
How does the beneficiary claim the title?
When you die, your beneficiary can claim the title by filing paperwork at the DMV. They’ll need a copy of your death certificate to show proof of death, which can be obtained through the Nebraska Department of Health and Human Services’ website. An Application for Certificate of Title is also required.
How can Boyum Law Firm help you?
To contact Boyum Law Firm for help with creating estate planning documents or with the probate process, click here.