One Woman, MCBA and State Bar Finally Get Death Statute for Vehicles Changed By Mark Moritz
Estate planning just got a little easier for Arizonans. ARS § 28-2055 has been amended to permit designation of a “transfer on death” beneficiary without the previous requirement that the estate be “small” as defined in § 14- 3971 (net value of personal property not greater than $50,000).
28-2055. Certificate of title; content requirements; transfer on death provision; delivery
A.The department or an authorized third party shall print the certificate of title, and it shall contain forms for assignment of title or interest and warranty by the owner, with space for notation of liens and encumbrances on the vehicle at the time of transfer. The certificate of title shall also contain the odometer mileage disclosure statement pursuant to section 28-2058.
B. At the request of the owner and on payment of a fee prescribed by the department by rule, the certificate of title may contain, by attachment, a transfer on death provision where the owner may designate a beneficiary of the title. The attachment shall include a notice to the owner and any beneficiary that the monetary limitation on the transfer of personal property in a decedent’s estate prescribed in section 14-3971 may apply.
Now the statute is consistent with Arizona’s other statutes that permit non-probate alternatives for transferring property at death: Pay On Death/Transfer On Death titling for personal property, and Beneficiary Deeds for real property. A person has been able to name a POD/TOD beneficiary of a bank or investment account with no limit on the value. A person has been able to record a Beneficiary Deed for real estate with no limit on value. If a person could transfer a million dollars’ worth of investments or real estate probate-free, why should they not be able to transfer $51,000 worth of vehicles probate-free?
How did the vehicle Transfer On Death statute get enacted in the first place? Why did it include the “small estate” language? How did it get fixed? Thanks for asking.
It started with one lawyer, Kathie Gummere, who said to herself, “My clients can arrange to leave their entire estates to their heirs with POD/TOD titling and Beneficiary Deeds, except for their vehicles. There should be a similar provision in the law so that heirs don’t have to go through the probate court just to be able to sell Dad’s RV when he dies.”
In 2004, she approached then-Senator Bill Brotherton (now a Maricopa County Superior Court judge), who agreed that it was a good idea, and sponsored the legislation in 2005. It did not pass. Gummere tried again in 2006, this time through attorney Jay Polk, who was working on proposed legislation on behalf of the Probate Section of the State Bar of Arizona. The idea never made it into the proposed legislation for that year.
Gummere persisted. In 2008, she contacted Sen. Ken Cheuvront. He recognized that it was a good thing for the people of Arizona, but his proposed legislation ran into resistance from the MVD, who seemed to be hung up on the “small estate” language they were familiar with from § 14-3971. Gummere (through Reps. Kirsten Sinema and Andy Biggs) explained to the MVD representatives that it was possible to leave a million dollar bank account via POD titling, but not a $51,000 vehicle. They were not persuaded. As a compromise, Rep. Biggs added the “small estate” language. That appeased the MVD, but didn’t help the people who were forced to hire probate lawyers and go through Probate Court proceedings because Mom’s minivan pushed her estate over the § 14-3971 limit.
Then, the Maricopa County Bar Association’s Estate Planning, Probate & Trust Section got involved. Norm Miller and I corresponded with Rep. Biggs, and met with some people from the MVD, but at that time, the legislature was preoccupied with the budget, so that attempt went nowhere. Miller and MCBA-EPPT member T. J. Ryan requested help from the Probate and Trust Executive Counsel of the State Bar of Arizona (PATEC). PATEC Chairman Jim Ryan added it to the proposed technical corrections bill; the PATEC board approved it; the Board of Governors of the State Bar approved it.
Then the State Bar’s lobbyist, Mark Bolton, (Brownstein Hyatt Farber Schreck, LLP) rounded up the legislative sponsors. Jim Ryan attended three separate hearings at the legislature in support of the entire technical corrections bill, the legislature passed it, and then Ryan had to respond to questions about the vehicle TOD section from the governor’s office. Governor Brewer signed it, and finally, seven years later, Kathie Gummere’s mission has been accomplished!
Many lawyers spent many hours trying to get this legislation passed. They were not motivated by self-interest. In fact, all the lawyers involved knew well that this legislation would reduce the need for Arizonans to hire probate lawyers. So, what was their motivation? A desire to serve the public, to reduce attorneys’ fees, and make things better and easier for the people of Arizona. Next time you see any of the people mentioned above, give them a big “attaboy,” with special thanks and congratulations to Kathie Gummere, who started it all.
By Mark Moritz
Reprinted from Maricopa Lawyer, The Official Publication of the Maricopa County Bar Association, Phoenix Arizona