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How does an executor sell a car?

Selling a car belonging to someone who is deceased can be tricky, in this post we outline how an executor will sell a car belonging to the deceased.

How to sell a car as an executor

When someone close to you dies and you’ve been named the executor of their estate, you’re likely experiencing a lot of emotions at once: Stress, grief, confusion, and frustration at the probate process are all normal things to experience while trying to settle a loved one’s estate.

Being an executor means juggling a variety of responsibilities, including taking care of what remains of their belongings. That can include maintaining and repairing things like real estate and antiques, ensuring that heirs receive the inheritance they’re entitled to, and selling off assets if an estate’s debts need to be paid off.

Here’s the thing about selling assets: As an executor, it’s your responsibility to follow the directions of the will and act in the best interest of the beneficiaries and the estate. If someone is named in the will as the beneficiary of a certain asset, such as a car, or if the car is jointly owned by the deceased and a beneficiary, then you as the executor must ensure that the asset goes to the designated beneficiary.

But if the asset is only in the name of the deceased, then you have the authority to manage it in a way that most benefits the estate. And if the estate is in a lot of debt and you need to sell assets to cover that debt, then you have a right to do so if they don’t have beneficiaries.

How to sell the car of a deceased person

When there is no will

If the deceased had no will, then they’re considered to have died “intestate.”

Their estate still needs to be settled, however, and the relevant probate court—meaning the court of the county or state where the deceased lived at the time of death—will nominate a so-called estate administrator, which is basically the same thing as an executor.

Usually, the deceased’s next-of-kin petition the court to be the administrator. Once an administrator has been appointed, that person will have to apply for probate and obtain letters of administration from the court, which will give them the legal authorization to settle the estate and handle the potential sale of any assets.

When there is a will

If there is a will, then the person who has been named as the estate executor in the will must formally apply for probate with the relevant probate court by submitting the will, a copy of the death certificate, and a petition for probate.

Once the petition has been approved, the executor will receive letters of testamentary from the court. These documents will give the executor legal authority to take possession of the car and manage or sell it.

Once the letters of administration or letters of testamentary have been received, you’ll need to obtain the title for the car and have it transferred over to you. If the deceased did not have this among their documents, you can request it from the DMV or the Ministry of Transportation.

You are now effectively the owner of the car. As executor, you will then have to take the following steps before putting the car up for sale:

Cancel existing insurance on the car

Your loved one probably had some sort of auto insurance for the vehicle (basic auto insurance is mandatory in many places, after all), so the first step will be to cancel the policy.

This is where those letters of testamentary/administration will likely come in handy, since an insurer may not otherwise allow you to cancel the policy on the deceased’s behalf. You’ll probably also have to show a copy of the death certificate.

Check for unpaid loans on the car

The next thing you’ll have to do as executor is whether your loved one had any unpaid loans for the car. When you sell the car, it must have a clean title. This means that the car doesn’t have any unpaid debt attached to it.

If there is debt (such as an unpaid title loan), you as the executor will have to pay for it via the deceased’s estate.

It's crucial to know:

If the deceased had vehicles owned through a lease, some dealerships might terminate the lease early once they've been notified by the executor of the death of the borrower - but dealerships are not obligated to do so. Be prepared to either pay the term of the lease or find someone for a lease transfer.

Finalize the sale

Now you’re ready to sell. Remember that you have the obligation to sell the car at a fair market value. Once you’ve found a buyer, you and the buyer fill out a transfer of title agreement (these will vary in name according to what jurisdiction you’re conducting the sale in) and include the agreed-upon price.

You’ll also have to prove that the car is debt-free. If the car was previously used for a title loan but that loan has been completely paid off, then you should obtain a release of lien letter from the loan company that issued the loan.

In some cases, such as with newer vehicles, you may also need a notarized bill of sale.

Selling the car of a loved one who passed away can be an emotional decision, especially if heirs were hoping to keep the car even though they weren’t named as beneficiaries or joint owners.

If you’re an estate executor who’s currently struggling with managing the assets in your loved one’s estate, then you don’t have to do it alone.

Our dedicated team of estate professionals can help you navigate many estate settlement problems at the fraction of the price of a lawyer. Schedule a free consultation with us today and find out how we can help.

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