During my discussions with estate planning clients, many times the topic of leaving a certain vehicle to a certain beneficiary comes up. Clients will say, “if I still own my RAV4 I want it to go to my grandson who is going to college.” In the past, this could only be noted in their Last Will and Testament. Today we have another straightforward option that is simple, cost effective, and avoids probate.
The owner(s) of a vehicle may create an interest in the vehicle that is transferable on death of the owner(s) by obtaining a Certificate of Title conveying the interest in the vehicle to one or more persons as transfer on death beneficiaries (each a “TOD Beneficiary”) at the local Indiana Bureau of Motor Vehicles (“BMV”). The Indiana BMV website explains:
When an owner requests to add one or more persons to the vehicle Certificate of Title as a TOD Beneficiary, the resulting title prints a statement like the following:
“[Owner] transfers on death to [TOD Beneficiary];” or
“[Owner] and [Owner] transfer on death to [TOD Beneficiary].”
A TOD Beneficiary designation that is printed on an Indiana Certificate of Title is not valid unless the vehicle owner(s) had signed the TOD statement prior to their death.
A TOD Beneficiary may be added to an Indiana Certificate of Title at the time of purchase (title transfer), or, if you already have title to the vehicle, you may apply for new title containing the TOD designation. Bring your proof of title transfer/Certificate of Title to your local BMV license branch. Once the new title is issued containing the TOD designation, the owner must sign and date the TOD signature line on the face of the title.
After death of the owner(s) of the vehicle, a TOD beneficiary who has acquired ownership of a vehicle, because of being listed on the vehicle’s Indiana Certificate of Title as a TOD beneficiary, must take the Indiana title containing the TOD designation and a copy of the decedent’s death certificate to a BMV license branch to apply for a new Indiana title.
Of course, insurance coverage will need to be added to the new beneficiary owner immediately.
The owner(s) of their vehicle have full control to sell and use the vehicle during their life. The TOD beneficiary only takes place upon their passing, and if the vehicle is still owned and the TOD designation has not been revoked.