“Don’t Junk that Old Car Yet!” by Attorney Victor Lembo (Audio)
Recently, the owner of a 1970 Ford Mustang put his car on eBay for sale. According to reports, the Mach 1 appeared to have faded paint and some wear and tear, but the true value of the vehicle was hidden. The Denver-based owner first used it in high school and sold it in 1984. However, he recently tracked it down and bought it back a few years ago. Now, the “M Code” Mustang sports a yellow paint over its initial blue coating, and has just over 67,000 miles on its 351 Cleveland V8 engine. It houses an automatic transmission, which replaced the factory 3-speed manual, and will be included in the sale of the car…with a purchase price of $25,000!
Many of us may have old clunkers in the garage, barn, or maybe even at a storage facility. There are various reasons why we choose to keep vehicles. Perhaps they hold both sentimental value to our families and we want to pass them down the line. Maybe they are worth money and we want to sell to the right buyer. Or possibly tinkering under the hood is a long-awaited hobby in retirement.
From an estate perspective, it is important to discuss vehicles of any nature as assets of your estate to ensure the planning provides your wishes for distribution. The car title controls ownership during lifetime, and will do the same at your passing, with various State nuances depending on where you live. Sinclair Prosser Gasior can discuss how to title, whether to put into a Trust, and if should you add someone’s name to the title.
During the estate administration, there are specified ways in which vehicles must be valued, depending on how it is being reported or transferred. Also, there are recognized guides for valuation, and certain criteria on how to value or appraise. Further, if there is an estate tax return, gifting of a vehicle, creditor claims, or a lien against the title, all will have different impacts in how the Trustee or Personal Representative will proceed for administration and distribution.
Therefore, if a vehicle has had a protective car cover over it for decades, or looks like a rusty piece of junk sitting in the driveway, do not assume that it is worthless. If you want to keep the vehicle, document its value and upkeep for estate planning purposes so it may be properly handled in your estate. You never know the type of value someone may place on your vehicle!
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