Funding your Trust: Vehicles

After your Trust is signed, you must take steps to fund it with your Trust Property.  If you do not fund the Trust with your Trust Property, the Trust may not be effective, and your estate may have to go through probate upon your death.

Your vehicle has a title, and is an asset, so should you fund that into your Trust as well?  We generally recommend you do not fund your vehicle into your Trust, whether it’s your daily driver or your show-worthy project car.  There are several reasons for this.

First, there is always the risk that your vehicle will be involved in an accident, and perhaps thus involved in a lawsuit.  If your vehicle title is under the name of your Trust, then the Trust may be joined into the lawsuit as a defendant.  This could put your other Trust Property at risk, and no one wants an adversarial attorney plunging into their private estate planning information.

Secondly, your insurance company may not be able to insure the vehicle if it’s under the name of your Trust.  If your insurance company does insure the vehicle, it may liken the Trust to a business and so your rates may go up.

Funding your vehicle into a Trust brings risk, and that risk generally isn’t worth it.  Especially since there are many states that will allow your executor to bring certain documents (like the vehicle title, the death certificate, and a copy of your Will) to the DMV for a transfer of the title without probate.  And don’t worry, your Islamic Trust or Islamic Family Waqf comes with a Pour Over Will, so in these circumstances your executor can bring that to the DMV and leave your Trust at home.