Vehicles can be jointly owned and titled in two different names, or a car can be owned individually. The way a vehicle is owned and titled impacts the way it is transferred after an owner's death. Depending on the state and the way the owners' names are listed on the title, the surviving co-owner may automatically inherit the vehicle. However, the surviving co-owner typically must complete at least some paperwork to transfer the vehicle into his name.
Rights of Survivorship
Co-owners with rights of survivorship automatically inherit from each other. Generally, spouses have rights of survivorship, and unmarried co-owners may also be able to choose ownership with rights of survivorship when they first title a vehicle in their names. With rights of survivorship, each co-owner has undivided ownership of the whole vehicle rather than having rights to half of the vehicle. Thus, when one co-owner dies, the surviving co-owner becomes the full owner of the vehicle. Since titles and state laws can vary, the surviving co-owner must check his state's laws and vehicle title to determine whether he has rights of survivorship.
If co-owners do not have rights of survivorship, they typically own the vehicle as tenants in common. This type of tenancy means the surviving co-owner does not automatically own the entire vehicle when the other co-owner dies. Instead, the deceased owner's share of the vehicle becomes part of the deceased's estate. Depending on the size of the deceased's estate, it may have to go through a probate process. In probate, the deceased's assets are gathered, debts paid and remaining assets distributed to the deceased's beneficiaries.
Transfer Without Probate
Many states have a process to transfer a deceased's estate without having to go through a court probate process, though the alternate process is generally reserved for small estates. If the estate qualifies for an alternative process, the beneficiary may be able to transfer the vehicle into his name by completing some paperwork with the state's vehicle registration department even if the vehicle was owned without rights of survivorship. For example, if the deceased's will leaves the vehicle to the co-owner and the estate is not probated, the co-owner may be able to transfer the vehicle into his name by completing an application or sworn statement with the state's registration department.
Changing the Title
Regardless of the type of ownership or rights of the surviving co-owner, you must change the vehicle's title to reflect the new ownership after one co-owner dies. Each state has a different process for transferring vehicle titles when an owner dies. For example, Wisconsin allows vehicle transfers to a surviving spouse or domestic partner if the surviving spouse or partner completes two forms, provides a certificate of title and pays a transfer fee. In Pennsylvania, the required paperwork depends on whether the co-owners had rights of survivorship, whether probate was opened and whether the deceased co-owner left a will.