Transfer on Death (TOD) Designation for Motor Vehicles
If you are one of our existing clients, you are familiar with the utility of death beneficiary designations as a way of avoiding probate and achieving the seamless transfer of assets at death. For example:
- You can designate a person to inherit your checking or savings account by filling out the bank’s Transfer on Death (TOD) or Pay on Death (POD) form.
- You can designate one or more beneficiaries to transfer for your retirement savings accounts upon the death of the plan participant.
This same technique is now available in California for registered boats, trailers and motor vehicles! Here is how it’s done:
Step One: Locate your original Certificate of Title (pink slip).
Step Two: Fill out the New Registered Owner section on the reverse side as follows:
First Line—Enter the current registered owner’s name is entered as usual. Only one registered owner name is permitted when using the TOD technique, so if you are using the “OR” technique already (“Joseph Smith OR Sally Smith”) then this technique is not for you at this time, but the survivor might want to use this technique when the time comes.
Second Line—The abbreviation “TOD” is entered followed by the beneficiary’s name. Only one beneficiary name is permitted. The TOD beneficiary may be an individual, corporation, trust, partnership, association, or other entity.
Third Line—The current registered owner’s address.
Signature Line—The registered owner’s signature is required.
Step Three: Take your Certificate of Title (pink slip) to DMV or, even better, your friendly AAA office if you are a member.
Step Four: When you make it to the head of the line, submit the completed Certificate of Title along with the transfer fee.
Step Five: The new Certificate of Title will arrive in the mail, eventually. Keep it with your original estate planning documents where your intended beneficiary can find it.
If you later change your mind, you may revoke a title held in beneficiary form or change the beneficiary name by submitting an application for a new title completed without a TOD beneficiary designation.
The TOD beneficiary is not a registered owner and the signature or consent of the beneficiary is not required for any transaction (e.g. sale) involving the vehicle/ vessel during your lifetime.
Of course, you can also transfer your vehicles to your trust and achieve the same result, but do you call your automobile insurer to confirm that this will not change your premium. The beauty of using your trust as the vehicle (pun intended!) for transferring your fleet is you do not have to stand in line again at DMV if/when you decide to change your death beneficiary(ies) and, of course, it is completely private.
As always, if you are a client of the firm, feel free to call use anytime if you have questions about funding your trust and other non-probate death transfer techniques for various asset types.