Top Ten Estate Planning Mistakes

  This starts a new series about the mistakes people make with their estate plans.  We will put a new article in this section each month.

#10 – Adding a child’s name to your vehicle title:

  A common mistake made by seniors is adding a child’s name to the title of their vehicle.  This is an invitation for litigation disaster.  Should the senior be involved in an accident, you can be assured all owners of the vehicle will be included in the lawsuit.

  There is also a question as to whether the child will be covered by the senior’s automobile insurance in these situations.  Frequently, the insurance company has not been told to name the child as an additional insured.

  The senior may also have problems with the vehicle if the child has financial problems, gets divorced, etc.  We strongly recommend seniors refrain from adding a child’s name to the title of a vehicle, unless it is done according to the procedures in the following paragraph.

  There is an alternative available to seniors in Indiana to ensure their vehicle passes to their child.  Rather than adding a child's name to the title as an owner, you can name them as a beneficiary much like you would on a bank account, using transfer on death instructions.  The following statement should be added to the vehicle title “Jane Doe (senior) transfers on death to Susie Doe (child).”  Upon the death of the senior the named beneficiary can go to the license branch and obtain a new title outside of the probate process.  This transfer will be subject to inheritance tax if applicable.

Please review your automobile title and remove the names of your children.

Keith P. Huffman
May 2009

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