Several years ago, legislation was adopted in Arizona to create the Beneficiary Designation For Vehicle Title Transfer Upon Death. It’s Arizona Department of Transportation, Motor Vehicle Division Form 96-0561, and is available on the Motor Vehicle Division’s web site (www.azdot.gov/mvd).
As its name implies, the form allows you to designate one or more individuals to receive title to your vehicle (car, truck, motorhome, motorcycle, 3-wheeled motorcycle, anything with a certificate of title and a license plate) if you own it at your death. The instructions on the form say that it should be “stapled to and presented with the current title, and is void if altered or erased.”
The form also contains a very helpful description of the options for designating joint title holders on a vehicle title. Although the form does not clearly say so, the description of those options is provided so that if you name two or more individuals as the beneficiaries on the form, you can choose the correct designation to indicate what you want to happen if, or when, the vehicle is later sold or one of the beneficiaries dies.
You get three choices for designating multiple beneficiaries on the form: (1) “or,” (2) “and,” (3) “and/or.”
What, it isn’t obvious what those mean? I suppose the first two are fairly obvious, but what does “and/or” mean? I suggest that you skip “and/or” and use “or” so that either of the new owners can make a subsequent transfer of the title. Use “and” only if you want both of the new owners to have to sign to transfer the title.
Read the descriptions carefully before you choose a designation, because that’s what will be shown on the new title for the vehicle. And don’t alter or erase on the form. If you get it wrong, get a new form and do it over. Your signature does need to be notarized, so make sure the form is complete before you sign it. And keep it with your title, because the MVD doesn’t do anything with it unless and until you are deceased.
The appropriate designation on the beneficiary designation form will clarify what happens to the ownership of your vehicle in the future, and can make later transfers easier.
Naming a beneficiary for your vehicle is similar to another set of Arizona laws that allow you to name beneficiaries on bank accounts and other types of financial accounts. The difference is that beneficiary designations for bank accounts and other types of financial accounts must be made on the records of the bank or financial institution. Like the beneficiary designation for your vehicle title, the beneficiary designations on accounts can be changed any time while you are still living.
You can also do the same thing with your house or other real estate by signing and recording a beneficiary deed. I have covered that topic previously, most recently in my September 2013, Estate Planning Law Report. You’ll find it, along with all of my past newsletters back to when I started putting them online in 2001, in the publications archive at: www.deconcinimcdonald.com/publications.
All of these methods of naming beneficiaries can be useful because they allow the assets that have plan your estate, and the beneficiary esignations to be transferred directly to the beneficiaries without the need for a court proceeding to administer your estate. There are some situations where a beneficiary designation might turn out to be less efficient than an estate administration, however. A beneficiary designation isn’t practical if you have all of the services too many individuals named as beneficiaries. If you have more than one or two beneficiaries who you want to share in the proceeds of an account, for example, it might be better to handle that in your will. As for a vehicle or a house, it usually is too cumbersome to have multiple co-owners. If that’s what you have in mind, I suggest that you consult your estate planning attorney about possible alternatives.
If you decide to make a gift of your vehicle in your will, remember that it can be included on your tangible personal property list. That’s a list of specific gifts that can be attached to your will and changed at any time without changing the will. The list cannot be used to make gifts of houses or other real estate, or financial accounts, however, because those things are not tangible personal property.
I will get into more detail about the tangible personal property list in a future Report.
Nathan B. Hannah is a Shareholder in the Tucson office, and practices in the areas of estate planning and administration, real estate, and commercial transactions. He is also a noted blogger, and you can find more of his articles on his private blog,
Contact Attorney Hannah: firstname.lastname@example.org or 520/ 322-5000