You may be more concerned about making funeral arrangements or updating your will when you make end-of-life planning decisions. But did you know that end-of-life planning is actually much more involved than that? When you die, the executor of your estate will have to take care of a lot of paperwork. If you owe debts, they’ll need to be handled through your estate and any existing accounts will need to be canceled — including your car insurance.
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Do you have a spouse or partner who is involved in your financial life? If so, this task may be a little easier. But if you’re single or if you solely manage your family’s finances, it’s important to organize your affairs. Use our end-of-life planning checklist to help advise you on the ways you can make your death easier on your grieving loved ones. We’ll do a deep dive into the best way to store your vehicle paperwork.
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Holding On to Vehicle Registrations
You’re usually required to register car purchases with your local government authority. The purpose of registering a vehicle is to:
- Ensure that you’re paying the proper taxes when you transfer vehicle ownership.
- Find an owner if the car is involved in a crime of some sort.
- Create a paperwork trail to help you prove that you own a vehicle. In short, it protects both your interest and the public’s interest.
Vehicle registration in the United States can be a little tricky. Each state has different requirements and fees associated with registration. Registering a vehicle is done through a state’s department of motor vehicles (DMV) or equivalent agency. This means if you move to another state, you will need to re-register your vehicle.
Generally speaking, no matter which state you live in, a vehicle — whether it’s a car, truck, or motorcycle — must be registered if you plan to use it on a public road. Your state may also require you to register motorized bikes or mopeds, though that can vary by jurisdiction.
Some motorized vehicles do not require registration. Tractors, for instance, are largely used on private property and may be exempt from registration laws, depending on your state.
Registering your vehicle isn’t a one-time thing. You must update your registration annually or biannually, depending on your state. Many states tie your registration date to your birthdate so it’s easy to remember. You may have to pay a nominal fee to your state’s DMV or equivalent agency every year.
You probably already know that you’ll be asked for your driver’s license, proof of insurance and registration if you’re pulled over, so you might keep your registration paperwork in your car. Surprisingly, this isn’t always considered best practice. Your car registration contains your name and address so it can put you at risk for identity theft.
Experts recommend that you keep this information in your wallet instead of your car’s glove box. You can also store it at home in a secure, fire-safe lockbox and keep photos of your registration and insurance information on your phone.
Finally, make photocopies of the original documents and use white-out or a marker to redact address information. The police will be able to use your name and registration number to pull up registration information in their computer system.
Old registration information should be discarded when you update your vehicle registration. Simply take your old copy out of your lockbox or other secure location and replace it with new information. Shred the old information to minimize the risk of identity theft.
Keeping Track of Other Car Paperwork
Vehicle registration information isn’t the only important car paperwork to keep track of. There are several other documents you might want to hold onto. Have these records handy in case you’re involved in a car accident or if you need to sell your vehicle.
They are also helpful for your next of kin to have access to when you die. Keep all your car paperwork in a labeled folder so family members can access it all at the same time.
A car title is a legal document that proves ownership of a vehicle. It contains lots of information concerning who has a legal stake in the car. This includes the Vehicle Identification Number (VIN), a unique 17-digit number that identifies your car. The title also includes the make and model of your car, the body style, a title number, and the date the title was issued.
Whenever a car is sold, the title needs to be transferred to the new owner through your state’s DMV. If you purchased the car using financing, the lender will typically possess the title until you have finished paying the vehicle off.
Let’s say your car is totaled in an accident. You or your lender will typically need to transfer the title to the insurance company in order to be compensated. Never store your title inside of your car. If your car is stolen and the title is stolen along with it, it reduces your ability to recover your car.
Instead, keep it at home in a lockbox or secure filing cabinet. Keep the title for as long as you own the car. Make sure your next of kin have the title handy — it can accelerate settling your estate. You may leave your car to someone as an inheritance and the title will need to be transferred to that person. Otherwise, your car may be sold in order to pay off any outstanding loan balance or as part of the process of liquidating your estate.
Proof of insurance
You’re required to have insurance on your vehicle in many states in order to drive it. You could receive a ticket or fine if you are pulled over and you don’t have proof of valid insurance. If you had active insurance but didn’t have proof of it available, these tickets and fines are often dismissed.
Penalties are often steeper in certain states. There are areas where driving without insurance can get your license suspended or your car towed. It’s worth checking frequently to make sure you have updated insurance in your wallet or in your glove box (with address redacted). If you pay your car insurance monthly or quarterly, take a moment to make sure you have a printed copy of updated insurance available.
Maintenance records and receipts
Properly maintaining your care can extend its life. It also increases your ability to resell it down the line. When you pass away, a well-maintained car can bolster the value of your estate. Keep a small folder with all records of car maintenance records.
You can also file receipts for new tires, oil changes, new air filters, or other maintenance. These are also best kept in your home, as some receipts will include your address.
Organizing Vehicle Registration and Other Car-Related Paperwork
There are so many ways you can set your loved ones up for success after your death. You can preemptively address health care concerns with advanced directives. You can begin planning and paying for your funeral or celebration of life ceremony.
And finally, you can organize all the paperwork and documents pertaining to your financial affairs. Even if you aren’t sick or dying, it’s important to prepare your next-of-kin for what they need to do.
A few times a year, make sure you have your paperwork in an easy-to-find location and update a list of passwords associated with your account. Let a loved one know where to find this paperwork in the event of your death. Your loved ones will be grateful for the way you pave the way and took their stress level down a notch. Prepping ahead of time will also help your own peace of mind.
- “Here’s Why You Shouldn’t Leave Your Registration in the Car.” Carfax.com, Carfax, 27 May 2019, www.carfax.com/blog/never-leave-registration-in-your-car.