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September 12, 2014 | money-management

Inheritability of Vehicles in Texas


We all have a love affair (or maybe a love-hate relationship) with our cars. Given how much time we spend in them between errands, commutes, and road trips, it’s no wonder we grow so fond of them.

Whether an auto is a classic, special edition, or even a plain vanilla car, you may be surprised to learn how much the vehicle means to family and loved ones following the death of the vehicle’s owner.

So what happens to a car in the state of Texas when the owner passes away? Well, it depends.

Are Loan Payments Still Being Made on the Vehicle?

If there is a loan secured by the car, find out what the lender’s rules are in these situations. Because Texas is a community property state, a surviving spouse may be held responsible for the debt, regardless of whether the spouse is listed on the vehicle title or even on the car loan. Regardless of what is or isn’t specified in the will, the state of Texas will only transfer vehicle ownership to the heir or heirs of an estate once the loan has been paid off and satisfied.

*Bonus tip – If the vehicle owner opted for Credit Life insurance coverage when they signed the loan papers, it will likely pay off or cancel any remaining balance on the loan, making the transfer easy. Check with the lender for details.

How is Ownership Transferred Once the Title is Owned Free and Clear?

In Texas, the DMV uses Form VTR-262 Affidavit of Heirship. Supporting documents differ depending on whether or not the estate is probated. Check with the TXDMV website for a list of needed documents.

Ultimately, seeking advice on estate planning can help mitigate potential complexities that surviving family members or heirs may be faced with, and it will allow you to clearly define who you want to inherit your beloved car.