A frequently employed estate planning instrument is the Living Trust or Revocable Trust. Such a Trust can minimize or avoid probate altogether. In order to be effective, the Trust should be funded, i.e. assets should be transferred into it.
Clients establishing a Trust often ask whether their vehicles are among those that should be transferred into the Trust. In almost every instance in Florida, the answer is a resounding “No.” Here are a few of the reasons:
1. Vehicles pose one of the most likely scenarios where a person can be drawn into a lawsuit–from an accident. A person does not want to have their Trust brought into a lawsuit.
2. Insurance companies do not look favorably on insuring a vehicle in a Trust–in fact, most won’t provide such insurance.
3. Vehicles are easily dealt with after death and rarely require a probate in order to transfer title. Therefore, one of the main motivations of a Trust, i.e. avoiding probate, does not come into play.
For these reasons, most knowledgeable estate attorneys in Florida would not recommend transferring one’s vehicles into a Trust.
