- Motor Vehicle
- August 10, 2017 | Authors: Peter B. Rosenwald; Lawrence D. Coppel; Andrew D. Bulgin; Marjorie A. Corwin; Bryan M. Mull; D. Robert Enten; Christopher R. Rahl; Robert A. Gaumont; Chastity E.C. Threadcraft; Christia A. Pritts; David S. Musgrave
- Law Firm: Gordon Feinblatt LLC - Baltimore Office
This law authorizes the sole owner of a motor vehicle to designate a beneficiary (TOD beneficiary) to take ownership of the motor vehicle after the sole owner’s death. The transfer is outside the estate administration process. The owner of a motor vehicle may designate a TOD beneficiary by applying to the Maryland Motor Vehicle Administration (MVA) for an updated certificate of title that includes a TOD beneficiary designation. The MVA is required to allow the designation, but may charge a fee for doing so, and the designation does not impact the ownership of the motor vehicle during the owner’s lifetime. The owner may change or cancel a TOD beneficiary designation at any time prior to death of the owner. Upon the death of the owner, ownership of the motor vehicle passes to the TOD beneficiary if the TOD beneficiary survives the owner. After the original owner’s death, the TOD beneficiary must apply to the MVA for an updated certificate of title listing the TOD beneficiary as the current owner of the motor vehicle. If the TOD beneficiary does not survive the owner, the motor vehicle becomes part of the deceased owner’s estate. The Act does not impact a secured creditor’s rights concerning a motor vehicle that is collateral for a loan and the TOD beneficiary takes title upon the owner’s death subject to the creditor’s pre-existing security interest.
Practice Point: Questions remain for secured parties concerning how they will get notice of a TOD designation and resulting transfer after the death of an owner who is a borrower. It is anticipated the MVA regulations will address these issues.