Law Office of
Michael J. Fleck, P.C.
-Illinois Legal Topics-
by Michael J. Fleck, Esq.
WARNING: THIS IS NOT LEGAL ADVICE. CONSULT YOUR ATTORNEY FOR INFORMATION CONCERNING YOUR PERSONAL SITUATION.
This is a series of discussions on legal issues in Illinois. Topics covered include Real Estate, Estate Planning and Administration (wills, trusts, probate and guardianship), Business Law, Employment and Civil Litigation.
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by Michael J. Fleck, Esq.
HOW TO SELL OR TRANSFER A VEHICLE AFTER THE OWNER DIES (ILLINOIS)
Many clients are tasked with the sale or transfer of a vehicle after a loved one dies. The steps are a bit complicated, and vary depending on the circumstances. Below is a list of steps one should take to make a sale or transfer of title.
- LOCATE THE TITLE, INSURANCE AND
IF APPLICABLE, LOAN INFORMATION - If the vehicle has no lender lien, then the owner should have the title. It is critical to find and secure the title. Insurance policies should be located and as noted below, the insurance carrier should be notified. If there is a loan on the vehicle, it is important to notify the lender of the death, and to make sure any payments due are made to secure and maintain the vehicle. Since the loan is secured by a lien on the vehicle, current payments may be appropriate to make so as to avoid a default and repossession of the vehicle. - JOINT OWNERS - the Illinois Vehicle Code makes it clear that if two or more persons are on title and one dies, the ownership is presumed to be joint tenancy with a right of survivorship. See, 625 ILCS 5/3-107.1 "Presumption of tenancy. When a certificate of title is made out to 2 or more persons, it shall be presumed that the title is held as joint tenants with right of survivorship." The surviving owner has the authority to sell or trade in the vehicle. A death certificate is required to transfer title. If the surviving owner intends to keep the vehicle, it is required that within 120 days of the date of death, a new title be obtained, transferring title into the surviving owner's name only. Some will not take this step unless and until they sell or trade in the vehicle in the future. While this is common practice, it can be a paperwork issue if time passes and the death certificate cannot be found.
- INSURANCE - Notify the insurance carrier regarding the death of the insured driver. While the personal representative of an estate is covered to drive a vehicle for the purposes of maintaining and protecting the vehicle, or to transfer title, the vehicle is not necessarily covered for personal use. If the policy lists other drivers, then those drivers may use the vehicle as long as the policy is in force. Many mistakenly think that because the deceased insured gave permission for others to drive the car (and there would be coverage during the decedent's lifetime), permission cannot be given after death. The better option is to make sure the vehicle has the right coverage, and if title is to be transferred to another family member, that should be done as soon as possible so the estate is not liable for any uninsured liabilities.
- LIEN HOLDERS - The vehicle title may have been issued to the lender (the "lien holder") to hold until the loan is paid in full. Title may not transfer until the lien is satisfied. If the estate has sufficient assets to pay the loan and release title to the owner, then a payoff request can be made to obtain the title. If the intention is to sell or trade in the vehicle, this can get more complicated. Most car dealers are equipped to make such a transfer, but the personal representative will have to be prepared to bring in certain documents to assure the dealer that they have authority to sell the vehicle. These documents are listed below.
- DOCUMENTATION NEEDED TO TRANSFER TITLE - Since the deceased owner is no longer available to sign title over to a new owner or buyer, the personal representative will have to sign. But the Secretary of State will need documentation to assure that the person signing this title indeed has authority to transfer title, and that the vehicle isn't subject to liens or claims against the estate. How is this accomplished? The short answer is "it depends". The longer answer is below:
- Official Information - Consult the Secretary of State's website for more details:
http://www.cyberdriveillinois.com/publications/pdf_publications/vsd275.pdf - Bill of Sale - If a sale is to be made, it is recommended that the Seller make out a Bill of Sale that evidences a sale between buyer and seller, including the name and address of buyer and seller, the date, a description of vehicle, the VIN, mileage on the odometer (or if the odometer is not a true mileage reading, notation of that fact), and a statement that the vehicle is sold AS IS-WHERE IS, no warranties of quality fitness and merchantability.
- Joint Owner - As stated above, title in the names of two or more persons is considered a joint tenancy. By law, upon the death of one of them, the surviving joint tenant(s) becomes the owner(s) of the vehicle. Within 120 days after the decedent’s death, the surviving joint owner(s) must apply for a title in their own name(s) unless transferring the title to someone else. In either case, the following must be submitted:
- Copy of death certificate or abstract;
- Original title (jointly owned) must be surrendered and need not be assigned.
- Application for Vehicle Transaction(s) (VSD-190) marked “CORRECTED TITLE” to have the decedent’s name removed from the title. The current odometer reading must be indicated on the application and the appropriate box marked either “actual,” “not actual” or “in excess of mechanical limits” (odometer rolled over).
- If the applicant plans to operate the vehicle, an Application for Vehicle Transaction(s) (VSD-190) to correct the registration must be submitted in addition to applying for a corrected title. A current registration can be assigned to the surviving joint owner.
- $95 title fee and, if applicable, $3 corrected registration fee payable to Secretary of State. Note: Corrected title applications involving the removal and/or removal and addition of an owner’s name due to death require a special $15 corrected title fee.
- Probate - If an estate is being formally probated in the Courts, whether a sale or transfer, the following must be submitted:
- Certified copy of letters of administration, or testamentary showing the name of the legal representative of the estate.
- Decedent’s title assigned by the legal representative of the estate to the buyer.
- Application for Vehicle Transaction(s) (VSD-190). The current odometer reading must be indicated on the application and the appropriate box marked either “actual,” “not actual” or “in excess of mechanical limits” (odometer rolled over).
- $95 title fee and applicable registration fees payable to Secretary of State.
- Proof of compliance with the Motor Vehicle Use Tax (RUT-50) and appropriate taxes payable to Illinois Department of Revenue but submitted with the above documents and fees to the Secretary of State.
- Small Estates - If the value of the personal estate does not exceed $100,000 and there is not real estate in the probate estate, then an administrator may proceed under Article XXV of the Probate Act (Small Estates). The following must be submitted:
- Small Estate Affidavit indicating the vehicle’s year, make and vehicle identification number. The affiant does not have to be an heir or legatee. If there is a will, a certified copy also must be submitted. While the Probate Act has a form that ought to be accepted by the Secretary of State, experience has shown that this can cause problems with the clerk who is handling the transfer. The Secretary of State has its own form, and this may be used to alleviate any confusion.
CAUTION: Care should be taken in filling out this form and the affiant should understand the liability of signing this Affidavit. Also, a certified copy of the filed will, if the owner dies with a will, should be made as well. NOTE: Many sellers are not comfortable with giving this often private information to a third party buyer or a car dealer (even though a filed will and a death certificate can be obtained as public records). In that case, it is recommended that the seller either accompany a buyer to the Secretary of State to make the transfer, and hand the private documents to the clerk, or title be transferred BEFORE a sale or trade is made, so that simply signing title is helpful.
http://www.cyberdriveillinois.com/publications/pdf_publications/rtopr31.pdf - Decedent’s title, which does not need to be assigned.
- Copy of death certificate or abstract.
- Application for Vehicle Transaction(s) (VSD-190). The current odometer reading must be indicated on the application and the appropriate box marked either “actual,” “not actual” or “in excess of mechanical limits” (odometer rolled over).
- $95 title fee and applicable registration fees payable to Secretary of State.
- Proof of compliance with the Motor Vehicle Use Tax (RUT-50) and appropriate taxes payable to the Illinois Department of Revenue but submitted with the above documents and fees to the Secretary of State.
- Attorney's Affidavit - If the estate is not being probated and the Small Estate Affidavit procedure is not applicable or appropriate, the transfer may be accomplished through the Attorney's Affidavit procedure. This procedure is rarely used. The following must be submitted:
- Attorney’s Affidavit on the attorney’s letterhead stating:
(a) Name and last address of the decedent;
(b) Date of death;
(c) Year, make and vehicle identification number (VIN) of the vehicle;
(d) Who the vehicle is being transferred to and the relationship to decedent, if any; and
(e) Other pertinent facts relating to the transfer of the vehicle. - Copy of death certificate or abstract.
- Decedent’s title.
- Application for Vehicle Transaction(s) (VSD-190). The current odometer reading must be indicated on the application and the appropriate box marked either “actual,” “not actual” or “in excess of mechanical limits” (odometer rolled over).
- $95 title fee and applicable registration fees payable to Secretary of State.
- Proof of compliance with the Motor Vehicle Use Tax (RUT-50) and appropriate taxes payable to Illinois Department of Revenue but submitted with the other documents and fees to the Secretary of State.
Experience has shown that while these procedures are set forth by the Secretary of State, when transfer of title is attempted, the clerk at the driver's facility may require different documentation. While this makes no sense, it does happen, and the transferor needs to be prepared to deal with these inconsistencies. Having a copy of the checklist and the Secretary of State's own publication (link above) to refer to may assist in a more smooth transaction.
It is indeed best to consult an attorney if you have any questions.
