Why You Shouldn’t Put Your Vehicles Into Your Trust (Right Away)
By Matthew P. Zanotelli, Meurer Law Offices, P.C., February 28, 2013
Many of our clients ask us why we do not title cars into the trusts we create. In fact, there are many reasons we do not usually title vehicles into the trust!
First and foremost, automobiles (and trusts, boats, or aircraft (and horses)) are liability-creating machines! Anyone who is hit by a vehicle titled into the name of the trust will be excited to find this out (because they will know that the vehicle is owned by someone with some assets!). This can expose the other assets of the trust to being taken away in a lawsuit if the accident creates a lot of damage to persons and property.
Secondly, vehicles titled into the name of a trust can be harder to insure and more expensive to insure. Due to the headache (and the general lack of “discount double checks” for trusts!) and expense, many of our clients just don’t do this.
Third, vehicles don’t tend to last very long. For that reason, our clients find that going to the time and expense of re-titling the vehicle is a pain if they are just going to sell or trade-in the vehicle in a few years. Waiting at the DMV isn’t that fun, so why do it if you don’t have to?
Finally, there is a process in Colorado that allows you to transfer tangible property worth less than $61,000 by using the “Affidavit of Collection of Personal Property” process, known more formally as “JDF 999.” This means that you generally do not have to go through probate for the purpose of retitling vehicles as long as all of the vehicles you own have a combined value of less than $61,000.00, so your trust will still help you avoid probate.
There are some exceptions to this general rule, however:
1. The total amount of vehicles you wish to title into the trust have a value greater than $61,000.00;
2. There is one extremely valuable vehicle (a collector’s item) that is hardly ever driven or used only in parades/car shows;
3. The vehicle will not be driven, used, or sold after the vehicle is placed into the trust.
Please discuss these issues with us when you are deciding on whether to include your vehicles under the ownership of your trust!
This blog is the opinion of its author. Individuals outside Colorado should speak with attorneys in their own jurisdiction to determine what laws and rules apply in their specific circumstances. Reading this blog does not enter you into an attorney-client relationship with Meurer Law Offices, P.C. Meurer Law Offices, P.C., is an Estate Planning firm with a presence throughout the Colorado Front Range. Please call 303-991-3544 to set up a client consultation if you wish to speak with an estate planning attorney on these issues.