New Jersey’s new “transfer on death” law for motor vehicles, which went into effect in May 2023, represents a significant step toward making the asset transfer process more efficient and cost-effective. It aligns motor vehicles with the ease of transfer typically associated with bank accounts and retirement plans, simplifying the lives of both vehicle owners and their beneficiaries.
New Jersey Statute Section 39:3-30.1b allows individuals who own a motor vehicle registered in the state to take advantage of a streamlined process for transferring ownership upon their passing. This includes not only cars, but also campers and motorcycles (though not boats, planes or other vehicles).
Titling with a TOD Form
To designate beneficiaries for your motor vehicle, fill out the Transfer on Death Beneficiary Form. As the vehicle owner, you hold on to this form and keep it with the vehicle’s Universal Title Application. This transfer doesn’t involve the vehicle in the estate, eliminating the need for letters of administration. After the owner’s death (or the last surviving co-owner if applicable), the beneficiary should present the form, the title, the death certificate and the Universal Title Application to the Motor Vehicle Commission.
If there are any liens on the decedent’s title, they must be settled before a new title is issued, unless the lien is being transferred to the sole owner. In this case, contact your lending institution for more information.
TOD Law Benefits
This new process provides several key benefits:
- Ownership Until Death: The vehicle owner maintains ownership of the vehicle until their passing.
- Beneficiary Flexibility: During their lifetime, the vehicle owner can freely change the beneficiary designations by completing an application for a new certificate of ownership.
- Multiple Beneficiaries: It’s possible to name more than one beneficiary, though the practicality of doing so should be carefully considered.
- Override of Wills and Trusts: The beneficiary designation takes precedence over any bequest stated in a Will or trust.
- Probate Bypass: Upon the owner’s death, the title to the vehicle automatically transfers to the named beneficiary without the need for probate proceedings or a court order.
This legislative change underscores the importance of periodically reviewing and updating your estate plan to ensure that your assets are distributed in the most efficient and desired manner. Whether it’s designating beneficiaries on financial accounts or taking advantage of the new “Transfer on Death” option for motor vehicles, careful planning can help you achieve your estate planning goals and provide peace of mind for your loved ones.