Until recently, vehicles in Minnesota were always considered potential probate assets if titled in the decedent’s name alone. This could cause unnecessary and prolonged hassle to surviving family members who either inherited a vehicle or were looking to sell the vehicle.
Now, according to new Minnesota Statute 168A.125, vehicles may now allow a transfer-on-death (TOD) designation. This may be accomplished by including a beneficiary designation in the application for certificate of title (PS2004), which can be found here. The statute was effective as of August 1, 2017.
When attempting to title vehicles in TOD form, please be aware that you must also submit a form PS2000 and original title certificate in addition to form PS2004. There is also a $38 processing fee.
A problem that may arise in the future has to do with the number of beneficiaries able to be listed on the form PS2004. While the statute specifically refers to “beneficiary or beneficiaries” of the vehicle, the form itself only allows for one individual beneficiary or one entity beneficiary to be listed. We would welcome anyone who goes through this process and successfully designates two or more beneficiaries to share their experience.
As with other TOD forms, the beneficiary has no interest in the vehicle until the death of the title holder. It should also be noted that the statute does not limit the rights of secured parties or creditors. Under Subdivision 5 (b) of the statute, there are a number of situations in which the beneficiary may be subject to existing liens or outright revocation of the TOD status. Therefore, it would behoove beneficiaries to be aware of any liens involving the vehicle.
Be sure to consider this designation if interested in ensuring that a vehicle avoids probate and allows for the easy transition from the decedent to another person or entity.
