A divorce decree is a court order signed by a judge when she grants a divorce. Depending on the circumstances, the decree may include provisions for transferring property and allocating debts of the marriage. Although the divorce decree can reassign ownership of vehicles and other property, the decree does not nullify or invalidate the title. The parties must request a new title from the vehicle registration agency in the county where the vehicle is located.
Each state has a system of titling and registering vehicles located within its boundaries. The certificate of title lists the vehicle identification number, current owner's name and address, and other pertinent information. On the request of the buyer, the state issues a new title whenever ownership changes. New residents must also request a new title when they move from one state to another. Because the current owner is liable for traffic tickets, parking tickets and damage caused by his vehicle, it is important to ensure the title is changed as quickly as possible after any transaction that changes ownership, including a divorce.
Car Titles After Divorce
If you owned a car during the marriage, the divorce decree should state which party will be the owner after the divorce. If you have several vehicles, each should be listed. In some states, listing the manufacturer, year and general description is sufficient; in other states, you must include the vehicle identification number and color as well. Generally, it is helpful to include an order stating when the car will be delivered to the other party, if applicable, and when the previous owner will sign the title over to the receiving party. Changing ownership of the vehicle in the divorce decree does not, however, change the car title itself since that document is handled by the state and the new owner must request a new title.
Read More: How to Turn a Car Title Over to a Spouse in Divorce
Transferring the Title
Depending on the state where the car will be located, you may have as few as 10 days or as long as 30 days to begin the process of changing the title. Active duty service members stationed in another state or country may request an extension of the deadline. The parties are responsible for handling the necessary paperwork, which typically involves submitting a request for new title, certified copy of the divorce decree, current title, and transfer fee to the local taxing authority. If, for example, John Smith owned the vehicle during the marriage but it is awarded to Mary Smith in the divorce, John signs the back of the title as seller and Mary requests a new title in her name.
Changing the name on the title does not affect liability for the monthly payments on the car. If you and your spouse co-signed the car loan, you are both responsible for the payments after the divorce even if only one party will be in possession of the vehicle. If possible, the spouse who keeps the car should refinance the note in his name only. Otherwise, the couple should sell the car before divorcing and split the proceeds, if any. As a last resort, you may include a provision in the decree that the party awarded the car will continue making payments on it until the note is paid off but the lender is within his rights to try to collect from both spouses if there is a default on the payments.