Wednesday, December 29, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website

In Vermont, do vehicles have to pass through probate?

Generally yes, because title to the vehicle must be transferred to the new owner before the new owner can register the vehicle in his or her name. This would normally happen if the vehicle is owned by an individual. If the vehicle is jointly owned, for example with a spouse, the vehicle would pass to the surviving joint owner by operation of law, without having to pass through probate.

When a vehicle is owned by an individual, there are still two ways to avoid having a vehicle pass through probate. The first is to place the vehicle in a trust, such as a revocable living trust. However, this is discouraged by most estate planning attorneys because if you end up in a car accident and the other driver sees that your vehicle is in a trust, often they assume you must be rich, and therefore they hire the best attorney they can to win a big judgment against the “deep pockets.”

The better approach is to leave vehicles outside of your trust even if you have a trust, and instead take advantage of a recent Vermont law that allows a transfer-on-death beneficiary designation to be added to the vehicle title. Upon the vehicle owner’s death, the designated beneficiary may re-register the vehicle in their own name, but because of the addition of the transfer-on-death beneficiary designation, there is no need to transfer title of the vehicle through the probate process.

For more information on this topic, see the article:

New Law Allows Vehicles to Pass Probate Free