Car ownership transfer after death: All you need to know

The death of a loved one is an unfortunate event for any family. However, once the grieving period is over, life slowly hits back, and the realisation comes that a lot needs to be done.

Being a part of the auto industry, the one question we get asked the most from surviving family members who find themselves with a vehicle registered in the name of the deceased is, how do we transfer car ownership? And don’t feel bad (in case you are) for asking this question, as the driver needs to carry valid ownership papers.

It should be noted that the process is not simple and involves many documents and settlements, not to mention the money needed to facilitate the ownership transfer. With so much on your plate, hiring a lawyer who’ll help settle the affair might seem right.

However, it is always a good idea to have a little idea about the procedure in advance, as it will help you navigate the process more effectively. So, without any delay, let’s find the answer to the question of how to deal with the legal aspects of motor vehicle inheritance.

Well, the entire process of car ownership transfer can be quite complex, especially after the loss of a loved one. First, let us look at the whole subject of car ownership transfer after death from a legal perspective.

Legal overview

In the Philippines, the Land Transportation Office (LTO) regulations and estate law govern the transfer of motor vehicle ownership after the owner’s demise. The entire process includes estate settlement, heir determination, and adherence to legal requirements (including possible fees and taxes and submission of necessary documents).

Important legal terms

One of the most important and repetitive terms you’ll encounter in this entire process is the estate. So, what is an estate? The word encompasses all the worldly possessions and assets of the deceased, including his/her properties, money, businesses, vehicles, and other assets.

Other terms you’ll notice used often are heirs and descendants. While the latter is a term used for the deceased, the former refers to the surviving family member.

Next up is the testate and intestate. When the decedent leaves behind a will, he/she is considered a testate. Intestate is the opposite, i.e., descendants without will.

Is there a will?

In cases where the decedent has a will prepared before passing, everything becomes much easier. As everything the deceased owned was split according to the will. Now, the big question is, what happens when a person dies without leaving a will behind? In such a case, the deceased's estate is settled among the surviving family members. However, it is not as simple as it sounds. You see, descendants must go through an extrajudicial or judicial settlement to split the estate equally.

Procedure for car ownership transfer

But a car can not be split in half, right? In such a case, there is nothing better than to have a will. If the deceased has not left behind a will, then in such cases extrajudicial settlement is the way to go. Here, the heirs talk among themselves and sign a deed of extrajudicial settlement of the estate.

Now, the talk among the heirs can end up in three ways -

• They gain ownership of the property
• There is a monetary settlement
• They waive off their right of ownership

If there is only one heir, the process ends with the execution of an affidavit of sole adjudication.

Whether there is a single heir or multiple heirs, signing the deed is mandatory. Once the deed is signed, it needs to be published in the newspaper to notify everyone about the deceased individual and the settlement of his/her estate. This is important because if anyone has any claim against the estate, a settlement case can be filed against the estate, thus ensuring there are no unpaid debts or liabilities.

What’s next? After the deed is published, the heir is required to present specific documents at the LTO to initiate the transfer of ownership. But first, the heirs must pay the deceased's estate tax.

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Documents required

Note, in addition to the documents mentioned above, heirs need to fill out the BIR Form 1801 (aka estate tax return form) within a year of the deceased’s death.

Law firm assistance

Why is opting for a law firm a good idea? A good law firm will assist you in navigating the legalities of motor vehicle ownership transfer after the owner’s death with ease. Here, you’ll get expertise in estate law, ensuring all the legal formalities and procedures are followed correctly, thus making the entire ownership transfer process super seamless.

Key points to remember

Below, we have discussed a few practical pieces of advice that are crucial for anyone looking to transfer car ownership after the owner's death.

• Do secure a photocopy of the deceased owner’s death certificate
• Get a thorough understanding of the process of estate settlement and transfer of car ownership from a lawyer
• One might need to pay estate taxes as a part of the settlement of the car owner transfer process. Do consider this possible expense beforehand
• It is a good idea to collect all the documents related to the car, for example, registration, ORCR, insurance, etc
• Do check the Land Transfer Office (LTO) prerequisites for car ownership transfer

Bottom line

Car ownership transfer after the owner's death is not as simple as one might think. The legal process associated with the transfer requires the utmost attention to detail and strict adherence to Philippine law. As we said before, while it is a challenging task, especially with a loss associated, understanding the proceedings will provide clarity.

Also Read: Everything you need to know about car title transfer in the Philippines