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Here is what I found out about estate planning and dealing with a collector car. Please realize your state laws may differ from mine (OHIO) and your estate planner or attorney may have different recommendations for your situation. My intent is to give each of my daughters a Thunderbird. I want to make this assignment while I can make the choice. I also want to maintain control (enjoyment, cruising and whatever) and full ownership of the vehicle. In the meantime, should I change my mind or have to sell them later, I can. Another major goal is to eliminate assets from my estate and probate taxes. Transferring the cars to my daughters can be accomplished in several ways with varying degrees of saving money. Since state laws, personal and fincancial circumstances vary greatly please check with your financial advisor, estate planner or attorney for the advice that best suits your needs if you are considering passing along a collector car and reducing your probatable estate.
1- Trust. If you have a trust the title can be transferred to your trust and be subject to the rules of your trust. Easy to do IF you have a trust and it removes another asset from your probatable estate. Trusts work well but can be expensive to set up and many who have them may not really need them.
2- Joint title. With a joint title both people are joint owners and each has a financial interest in the vehicle. Either could legally force the sale. This works best for husbands and wives (if happily married) and the title will easily pass to the survivor. If selling, both have to sign.
3-With Right of Survivorship. With a ROS designation the 2nd person on the title is NOT a beneficiary but is considered a joint owner! The title is subject to attachment or claim and is treatable as any other co-owned property. Both need to sign off to sell.
4- Transferr on Death. The biggest financial advantage of a TOD designation is the vehicle is NOT considered part of your probatable estate or subject to applicable taxes. With a TOD designation for the second party (my daughter) I retain FULL control and FULL ownership of the car. I can sell at anytime without her involvement because she is a beneficiary NOT a joint or co-owner. I am free to change my mind at anytime and can get the title changed back to my name by paying the $6 transfer fee. The title automatically transferrs to her by the presentation of ID, death certificate, and paying the transfer fees. This is not a sale and therefore no sales taxes are paid and any special or vanity plates remain in use. In short a very simple way to avoid probate and transfer the ownership while retaining full control. When I did this the clerk said very few people take advantage of this and she doesn't know why. There are no downsides - other than the $6 transfer fee.
Again, consult your advisor if you think this is applicable.
J
1- Trust. If you have a trust the title can be transferred to your trust and be subject to the rules of your trust. Easy to do IF you have a trust and it removes another asset from your probatable estate. Trusts work well but can be expensive to set up and many who have them may not really need them.
2- Joint title. With a joint title both people are joint owners and each has a financial interest in the vehicle. Either could legally force the sale. This works best for husbands and wives (if happily married) and the title will easily pass to the survivor. If selling, both have to sign.
3-With Right of Survivorship. With a ROS designation the 2nd person on the title is NOT a beneficiary but is considered a joint owner! The title is subject to attachment or claim and is treatable as any other co-owned property. Both need to sign off to sell.
4- Transferr on Death. The biggest financial advantage of a TOD designation is the vehicle is NOT considered part of your probatable estate or subject to applicable taxes. With a TOD designation for the second party (my daughter) I retain FULL control and FULL ownership of the car. I can sell at anytime without her involvement because she is a beneficiary NOT a joint or co-owner. I am free to change my mind at anytime and can get the title changed back to my name by paying the $6 transfer fee. The title automatically transferrs to her by the presentation of ID, death certificate, and paying the transfer fees. This is not a sale and therefore no sales taxes are paid and any special or vanity plates remain in use. In short a very simple way to avoid probate and transfer the ownership while retaining full control. When I did this the clerk said very few people take advantage of this and she doesn't know why. There are no downsides - other than the $6 transfer fee.
Again, consult your advisor if you think this is applicable.
J