Is Probate Needed When a Car is the Only Asset?
Probate is a court-supervised legal process to settle a person’s estate after they die, whether they have left a will or not, the latter of which is called “dying intestate” in legal terms.
The problem with probate is that it can not only be lengthy but also often costly, especially if there are challenges to the will. If there is no will, then the court will use state intestacy laws to designate how the estate is to be distributed to heirs.
Not every asset needs to go through probate, however, and small estates with few assets can sometimes avoid the process altogether. Legal provisions also provide for transferring some assets directly upon death without the need for court proceedings.
As a more specific example, I’ve been asked: “My spouse died and we don’t own very much except a car. Do we need to go through probate to transfer title?”
There are a couple of ways under Texas law to avoid probate in this situation. One you can accomplish before the spouse actually passes away, the other afterward.
If you have questions or concerns about probate and how assets will pass between spouses or family members and you’re in or around Corpus Christi, or throughout South Texas and The Coastal Bend area in general, contact me, Russell Manning, Attorney at Law.
I will be happy to answer your questions, address your concerns, and guide you through estate transfer, either through probate or using alternative means if your estate qualifies.
Transferring a Car Without Going through Probate
The answer to this depends on a few factors, one of them being the size of the estate. If, as in the question above, the car is the only or main asset, then legal steps taken in advance of the loss of the spouse can help ensure a speedy transfer. If no steps are taken in advance, there is an alternative to probate.
Using the DMV to Transfer Title in Advance
If you plan ahead (which can be an understandably touchy subject if you’re uncomfortable contemplating death), you can fill out two Texas Department of Motor Vehicles (DMV) forms. One is called Beneficiary Designation of a Motor Vehicle, which must be filed first, followed by the Application for Texas Title and/or Registration form, which asks the Texas DMV to reissue the title to the vehicle with the name of the beneficiary on it.
Using an Affidavit of Heirship to Transfer Title
A document called an affidavit of heirship can be filed to avoid probate if the deceased’s estate consists mostly of items in their name and they left no will. The downside is that this process does not transfer title or ownership immediately, but once it has been on file for five years with deed records in the county where the deceased died, the filing becomes evidence that ownership and title have passed.
The affidavit has certain legal requirements, including that it must be witnessed and signed by two disinterested parties. “Disinterested” means the individuals had knowledge of the deceased but do not stand to benefit financially from the estate.
Filing a Small Estate Affidavit to Avoid Probate
If a spouse dies without a will, an exception exists for bypassing probate if certain conditions are met. Chapter 205 of the Texas Estates Code allows the heirs, who are called “distributees” in legal terms, to file what is called a small estate affidavit (SEA).
The SEA covers only those estates that, excluding homestead property, total $75,000 or less in value. No real estate outside of homestead property (generally, a primary residence) can be transferred in this manner.
The SEA also allows for exempt assets to be transferred outside of probate, and exempt assets include “a two-wheeled, three-wheeled, or four-wheeled motor vehicle for each member of a family or single adult who holds a driver's license or who does not hold a driver's license but who relies on another person to operate the vehicle for the benefit of the non-licensed person.”
Certain conditions must be met for a small estate affidavit, however:
- No petition for the appointment of a personal representative is pending or has been granted by the court (a personal representative is named in a will to carry out the deceased’s wishes)
- Thirty days have passed since the date of death
- The value of the estate is $75,000 or less, excluding any homestead property and other exempt assets (life insurance policies and retirement accounts with named beneficiaries, for example)
- The affidavit is filed with the clerk of the court that has jurisdiction
- The judge approves the affidavit
- The distributees must then prepare a notice and send a certified copy to each person who owes money to the estate, who is in custody or possession of estate property, or anyone else who “acts as an agent for any other right belonging to the estate”
- A certified copy of the approved affidavit and order of approval are filed in the county property records
Probate Guidance You Can Trust
Property in Texas acquired during marriage is considered community property, meaning each spouse has equal ownership of assets. If a spouse dies with no will, the surviving spouse will be awarded 50% of all assets.
Some assets will pass without probate, including life insurance policies and retirement accounts with named beneficiaries, property held in joint tenancy with the right of survivorship, and joint bank accounts.
In the case above, the surviving spouse would inherit 50% of the car if the title were in the name of the deceased spouse only. The other 50% would have to be probated unless the title was transferred through the DMV in advance, or an affidavit of heirship or SEA is filed.
For all your probate questions and concerns, contact me, Russell Manning, Attorney at Law. I proudly serve clients in and around Corpus Christi, and throughout South Texas and the Coastal Bend area.