If you live in Arizona and own a vehicle, good news! Estate planning just got a little easier for you. Arizona Revised Statues Section 28-2055 permits a vehicle owner to transfer the vehicle on his or her death by designating one or more beneficiaries. Previously only people with estates having a net personal property value of $50,000 or less could take advantage of this method of transfer. Although helpful for some, many Arizonans missed out on this easy method to transfer their vehicles. However, the Arizona legislature recently voted to change A.R.S. § 28-2055 making this easy method of transfer available to all Arizonans.
Now A.R.S. §28-2055 is consistent with other Arizona statutes governing non-probate alternatives to transferring property at death: beneficiary deeds for real property and pay on death / transfer on death titling for personal property. Previously, people could designate a pay on death / transfer on death beneficiary of their bank or retirement account with absolutely no limit on the account’s value. People could also transfer real estate with a beneficiary deed, regardless of the property’s value. It made little sense that someone could transfer a $500,000 bank account or a $1 million piece of real estate probate free, but they could not transfer $51,000 worth of vehicles probate free.
As of July 20, 2011, that has all changed. A.R.S. § 28-2055(B) now reads:
At the request of the owner and on payment of a fee prescribed by the department by rule, the certificate of title may contain, by attachment, a transfer on death provision where the owner may designate a beneficiary of the title.
This probate-free method of transferring vehicles is now available to all Arizonans. First, you will need the vehicle’s current title. If you don’t have this, contact the Arizona Motor Vehicle Division for more information on obtaining a certificate of title. Once you have your vehicle’s title, you will need to fill out the MVD’s Beneficiary Designation form, which can found by visiting http://www.azdot.gov/docs/mvd-forms-pubs/96-0561.pdf?sfvrsn=0 and selecting the ‘Beneficiary Designation’ form on page 3. This form will allow you to transfer the title of the vehicle to the person(s) you designate upon death.
Filling Out the Beneficiary Designation Form To Transfer Your Vehicle Probate Free
First: Enter the Vehicle Identification Number and the year and make of your vehicle. This information should be on the vehicle’s title.
Second: Determine what person(s) the vehicle should be transferred to upon death. Write each person’s full legal name under ‘Beneficiary Full Legal Name’. If you know the person’s date of birth you should enter it. This will help eliminate any potential confusion. If you want to leave the vehicle to only one person, leave the ‘Legal Status’ box blank. If you are leaving the vehicle to two or more people, you will need to decide how you want the beneficiaries to own your vehicle. Here are the options:
Joint Tenants: Each person has full authority to transfer ownership of the vehicle or take out a loan on the vehicle. The names on the title will read: Bob Smith or Mary Green. If this is what you want, write OR in the ‘Legal Status’ box next to each beneficiary’s name.
Tenancy in Common: The signatures of each party will be required to transfer ownership of the vehicle or take out a loan on the vehicle. If one party dies, the deceased party’s interest must be handled with their estate. The names on the title will read: Bob Smith and Mary Green. If this is what you want, write AND in the ‘Legal Status’ box next to each beneficiary’s name.
Joint Tenants with Right of Survivorship: The signatures of each party will be required to transfer ownership of the vehicle or take out a loan on the vehicle. If one party dies, upon proof of death, the surviving party may sign alone. The names on the title will read: Bob Smith and/or Mary Green. If this is what you want, write AND/OR in the ‘Legal Status’ box next to each beneficiary’s name.
Third: Once you have finished filling in this information, stop: do not sign the form. Take the form with your title to your local MVD office. You must sign the form in front of the MVD agent and have the MVD agent notarize your signature. (You can alternatively sign in front of a regular notary.) Give the completed form and your title to the MVD agent along with the $4 fee. The MVD agent will give you a new title with the beneficiary information on it. Your vehicle will now be transferred, probate-free, to the person(s) you named upon death.