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If you are reading this I bet you have a revocable or Irrevocable living trust. And I’ll also bet you do not have your car included in the trust. So what do you do about your car to keep it out of probate? If you want to have your car in the trust you must buy it in the name of the trust. If you now own the car and want to move it to the trust your local DMV may see that as a “sale” and want to charge you sales tax. A better solution would be to wait until you are older and then buy the car in the name of the trust. You will likely buy at least one more car before you die.

Then there is the insurance aspect. If you have insurance on your personal car and are doing ANYTHING that is business related even if it is for the place you work the insurance company may deny your claim because you were not using it for personal use but rather business use. So if you are using your personal car to make a donut run for the meeting this morning and get in an accident don’t tell anyone it was to make a donut run for work, tell them you were going to the grocery store. If the officer writes down you were making a donut run for work and the insurance company sees that your claim could be denied. Auto insurance for business vehicles is considerably higher than that for personal use. Check with your insurance company to see if they have a supplemental policy for personal vehicles that are also used for business. If they do and it isn’t too expensive then you may want to buy your next vehicle in the name of the trust to keep it out of probate.

Then there is the issue of a law suit from an accident. Do you really want the suing party to be suing your trust instead of you personally? After all your major assets should be inside the trust and not exposed to a law suit since the trust is a separate entity. And you personally don’t really own anything of value. Your trust owns everything of value.

Bottom line in regards to cars and probate is to think hard before you move a vehicle that is used for business into your trust.