Selling a Decedent’s Car

Thursday, November 30, 2017

    If no probate or small estate affidavit will be filed, sometimes a car owned by someone who has died can be transferred to the heirs at law by an Affidavit of Heirship available at the DMV.  

    This can be difficult if there are many heirs at law, since all heirs at law must sign and complete an Inheritance Affidavit.  

    Then the new owner can sell or keep the car just as he or she pleases.  See the separate article on this topic for more information on Affidavits of Heirship for cars and for bank accounts.

    If there is a probate or a small estate proceeding, and if the car is to be sold, rather than transferred to an individual, the personal representative or small estate affiant (the executor) must take reasonable steps to obtain the highest reasonably possible value for the vehicle.

    A personal representative or a small estate affiant may more commonly be called the executor of an estate.  Regardless of what the person is called, this person has a fiduciary obligation to obtain the best results for an estate if something like a car or other vehicle is sold as part of the estate administration or probate.

    On the other hand, there are limits to what is reasonable.  In many circumstances, it may not be reasonably possible to obtain the highest conceivable value for an item such as a car.  It is true that, in the best of all possible worlds, a private party sale to an individual may produce more money than a sale to a dealer.  On the other hand, a private party sale may require the seller to list a car on Craigs List or some other such forum, and may require the seller to take significant time off work to show the car.  Such a sale may also result in the seller having to incur some personal risk or some risk for the estate.  As an example, the seller might feel that they had to ride along on any test drive, which could be dangerous.  Alternatively, if the seller does not ride along, the seller could risk the car being stolen by the person who is testing the car.

    It is in part because of such considerations that a significant difference may exist between the likely eventual private party sale price and the price a dealer will offer for a used car.

    Sometimes this means that the highest price that is reasonably feasible may be the dealer price.

    One advantage of a full probate, even if a small estate proceeding is possible, is that in a full probate, the executor can obtain instructions from the court authorizing the sale of the car in certain ways, and in effect pre-approving a dealer price, or the risks involved in a private party sale where the seller allows potential buyers to take the vehicle for an unaccompanied test drive, or a sale to a relative or friend for a specific price, or whatever else may seem appropriate to the executor.