How to Title an Inherited Vehicle in Texas

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Texas allows residents who inherit a vehicle a relatively easy path to transferring its title, whether their inheritance came through a will or pursuant to state intestacy laws. No matter how they received the car, they are responsible for filing the proper documents to transfer the title to their name. They must also pay any accompanying taxes. Texas has recently passed a "transfer on death" option for beneficiaries, which means they no longer need to go through a probate court proceeding to transfer the vehicle into their name.

Titling a Vehicle Through Heirship in Texas

An heir is a person who inherits the estate of a person who dies intestate, or without a will. Under these circumstances, the heir would receive the property of the deceased, according to Texas law. A person who inherits a car through heirship must fill out an Affidavit(s) of Heirship (Form VTR-262) from the Texas Department of Motor Vehicles (DMV).

If more than one heir exists, each person must sign the affidavit of heirship and have the signatures notarized, or they can fill out individual affidavits, but must notarize each. Under federal law, the heir or heirs must fill in the odometer section on the heirship form to verify the mileage of the vehicle they're about to inherit.

An heir must also fill out and submit these documents and pay fees to gain title to an inherited vehicle:

  • Affidavit of Motor Vehicle Gift Transfer or Form 14-317.
  • Application for Texas Title and/or Registration or Form 130-U.
  • Certified copy or original court document showing that property administration was unnecessary (if filed in court).
  • Release of lien documentation if the vehicle shows a lien.
  • Vehicle Inspection Report from a Texas Department of Public Safety inspection station, which allows the heir to apply for vehicle registration.
  • Proof of insurance covering at least $30,000 for each person for bodily injury, $60,000 per accident for bodily injury and $25,000 for property damage liability.
  • Payment of the title transfer, filing and registration fees.
  • Payment of sales or gift taxes.

Titling a Motor Vehicle via Probate Court

A probate court authenticates and decides the rightful beneficiaries of the decedent's property if the decedent left a will. An estate's executor has four years from the testator's death (the person whose will it is) to file for probate in Texas. If they don't do it within that time, intestacy laws will dictate who receives an inheritance from the decedent.

After probate, a person titling and registering an inherited vehicle will need:

  • Court-appointed executor or administrator to show the county tax office an original or certified copy of court-provided documentation including letter of authority, letters testamentary or letters of administration authorizing the executor to act on behalf of the decedent.
  • Release of lien documentation if the vehicle shows a lien.
  • Application for Texas Title and/or Registration (Form 130-U).
  • Vehicle Inspection Report from a Texas Department of Public Safety inspection station, which allows the beneficiary to apply for vehicle registration.
  • Proof of insurance covering at least $30,000 for each person for bodily injury, $60,000 per accident for bodily injury and $25,000 for property damage liability.
  • Payments for the title transfer, filing and registration fees.
  • Payments for sales or gift taxes, if relevant.

Transfer on Death Option for Texans

On September 1, 2017, Texas Senate Bill 869 17 was passed into law, allowing a decedent to designate a beneficiary to pass the vehicle title to upon their death. This option also allows the beneficiary to avoid probate court when titling the car. For this designation, the vehicle owner must submit an Application for Texas Title and/or Registration with the name of the beneficiary listed to be effective upon their death.

Until that point, the current owner retains full rights to the car, meaning they can sell it, or remove or change the beneficiary by submitting a new application. This law also clarifies that the beneficiary designation on the application trumps any contradicting statement in the decedent's will.

Upon the testator's death, the beneficiary must submit the original title with a new Application for Texas Title and/or Registration and proof of the former owner's death. They must submit this information to the DMV within 180 days of the decedent's passing or the car will go to someone else. This could be another person named in the will or another relative according to Texas intestacy laws.

Gift Taxes and Inherited Vehicles in Texas

Texas requires beneficiaries of inherited vehicles to pay a $10 gift tax when a decedent gifts a car to them. It applies in each of these circumstances:

  • When someone receives the vehicle through the deceased person's will or heirship.
  • Transfer of the vehicle from a deceased spouse to a surviving spouse.
  • Transfer of the vehicle to another surviving owner or owners if there was joint ownership.
  • Transfer of a motor vehicle to a beneficiary of a testamentary or revocable trust.

When the person who inherits the car transfers ownership of it to someone else, the person who receives the vehicle will also owe a motor vehicle tax unless they are a qualifying recipient, in which case the $10 gift tax applies. If the car has a lien, and the inheritor assumes the debt, they will owe a motor vehicle tax based on the car's standard presumptive value (SPV), or the average sales price of vehicles sold through private-party transactions in their area. The state does not use a vehicle's condition to determine the SPV.