/>iThere are a couple of possibilities for simplifying the transfer of assets after death. A bank account can be transferred automatically at death by a “transfer on death” (or simply TOD) form, or beneficiaries can be named on retirement accounts or life insurance policies. Such acts ensure that an asset will automatically and immediately be transferred to the designated person without any type of court proceeding. To further simplify the process of transferring assets, a “motor vehicle” (think cars, campers, and motorcycles, but not boats, planes, or trains) can now be titled in a TOD form as well.
Under New Jersey Statute Section 39:3-30.1b, effective May 9, 2023, “[t]ransfer of motor vehicle on death” permits individuals owning a motor vehicle registered in the State of New Jersey to take advantage of this seamless process by 1) writing on the title or other applicable form of ownership TOD followed by the name of the beneficiary (or beneficiaries), and 2) filing it with the appropriate agency. This functions like a TOD bank account or retirement account with a beneficiary designation, as follows:
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The vehicle owner continues to own the vehicle up until the time of death;
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The vehicle owner can change the beneficiary designations freely during his or her lifetime by requesting and completing an application for a new certificate of ownership;
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More than one beneficiary can be named (although whether that is sensible is another issue);
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The designation overrides any bequest in a Last Will & Testament or trust;
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Title to the vehicle automatically vests in the named beneficiary upon the death of the owner; and
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The vehicle passes outside of the probate process, and a court order is not needed to transfer title.
This is good news for creditors. Similar to leaving property encumbered by a mortgage, any beneficiary will take title to the vehicle subject to any lien, regardless of when the lien was created. Thus, lienholders need not worry about updating their lien during the lifetime of the owner.
Overall, this statute is another step in the right direction towards making the transfer of assets a more efficient and economical process.
