Transferring a Car Title To A Family Member
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Transferring A Car Title To A Family Member

A lot of people ask about the process of transferring the car title to a family member. There are several reasons why people need to know about it. Transferring ownership of a car is a crucial step when a person is gifting a car to any of their family members. Moreover, an individual might receive a car in inheritance, and it might even be required in a case where the car of a deceased person is being passed on to their living family members.

All these situations require transferring ownership title, without which the receiver will not have legal permission to drive the car. Therefore, it is important to learn everything about the process before one can begin working over it.

You need to have a legal ownership title whether you are purchasing a car from a dealership or a private seller. Without legal ownership, you will not be able to transfer the title in your family member’s name.

The process involves some complications and is not as easy as purchasing or selling a car. The fact that there is no monetary exchange between the giver and the recipient is what makes the process challenging.

The Importance of Car Title

The legal document that serves as proof that a car is under your ownership is the car title. It is an essential document that every car owner must have in their possession. A car title has important details about the car and its ownership on it. Therefore, it is best to keep it safe. In case you lose the car title document, you need to visit the Department of Motor Vehicle immediately.

A car title contains the name of the vehicle owner, Vehicle Identification Number, odometer reading, the vehicle weight class, and the buyer and seller details.

Gifting a vehicle to a family member without appropriately transferring the title you could be putting yourself and the recipient at risk.

The matter of transferring vehicle title becomes complicated if the car you are planning to gift is of a deceased family member. It is crucial for people to have the Application for Texas Title and/or Registration as without a legal vehicle title transfer the recipient will never be able to sell off, transfer, or donate the car in the future.

The process of transferring a Car Title

Be it inheritance, gift, or a deceased family member’s car, transferring the title is a high-priority task. It is an essential step, not doing so will expose you and your loved ones to legal complications. The process of transferring the title varies from state to state. You can get the details of the process from the Department of Motor Vehicle. Before you start with documentation, you must visit your state’s DMV for a complete guideline.

Accurate documentation is the key to a seamless process of title transferring. You must compile all the necessary documents that you will have to present at the time of the transfer. You must carefully prepare all the documents to eliminate any complications during the process.

Before you finalize your decision about transferring your car, make sure the recipient is a legal one. The people who are legally considered immediate family members are eligible for a family car title transfer. Spouses, children, parents, siblings, grandchildren, and grandparents are the ones that are eligible for a family member’s car title transfer.

Make sure you have all the following documents at the time of the car title transfer!

Step 1: Odometer Disclosure Statement

Taking the odometer reading is the first step in transferring the car title. It is part of the Assignment title document. However, if the car is less than 10 years old, you will have to provide an odometer disclosure statement.

Step 2: Assignment of Title

The next step is to fill the Assignment of Title. It consists of two separate sections, one for the owner and the other one for the recipient. The document must contain the date of the transfer. Typically you will have to include the odometer reading statement unless you qualify for the odometer disclosure statement. Check with the local DMV to see what the qualifications are. The signed title has to be presented at the time of transfer.

Step 3: Application of Certificate of Title

The Application of Certificate of Title is another essential document that you are required to provide at the time of title transfer. If the recipient has to pay the $10 gift tax, you must mention it on the document.

Step 4: Affidavit of Motor Vehicle Gift Transfer

You will also have to provide an affidavit of motor vehicle gift transfer when filing for title transfer.

Make sure you carefully complete all these documents and include only the true and authentic details. Along with these documents will have to pay a title transfer fee, which varies from state to state.

How to receive a car through Inheritance

Even in the case of inheritance, transferring the vehicle title is essential. The matter of inheritance is a bit complicated as compared to gifting a car to a family member. You will have to submit an Affidavit of Heirship for a Motor Vehicle to complete the vehicle title transfer process when inheriting a car.

According to federal law, the inherited property does not fall under taxable income. However, these six states; Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania, impose a tax on inherited property. In Texas, the recipient of the inherited car will not have to pay sales tax.  

Moreover, car insurance is another important aspect when receiving a car in inheritance. The policy covers the drivers that are on the policy or the living spouses. If you are not listed in the policy, the car insurance will not cover you. You will need car insurance, you can choose pre-paid insurance or any other insurance policy that suits your requirements.

When gifting a car to your family member, rather than selling, you will have to carefully prepare the paperwork carefully. Gifting a car is not as simple as selling the car, and you must be extra cautious! By following the step-by-step guide of gifting a car in Texas, you can avoid getting stuck in any legal matters. 

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