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My Customer Died: What Should I Do?


Death and taxes are two of life's unavoidable certainties. To the buy-here pay-here dealer, . . .

Death and taxes are two of life's unavoidable certainties. To the buy-here pay-here dealer, death also brings questions about what to do with a vehicle after a customer passes away.

Ideally, the customer leaves behind a will or the contract and title has two owners with rights of survivorship filed with the state. To file rights of survivorship use TXDMV's Form VTR-122, Rights of Survivorship Ownership Agreement for a Motor Vehicle. However, a will or clear survivor ownership is often not the case and a dealer is often forced to determine what to do with the vehicle. This becomes particularly challenging when a deceased customer's family member or multiple family members ask the dealer if s/he can keep the car and simply continue making payments.

If the dealer agrees to allow a relative to take over the contract payments, then the dealer might consider having the relative sign all parts of the contract, just as the customer did. Transferring the title requires significant effort from the relative requesting the vehicle after it is paid off. After payoff, if the customer is the rightful heir, they can transfer the vehicle using TXDMV's Form VTR-262, the Affidavit of Heirship for a Motor Vehicle. You can find the form online or pick one up at any county tax assessor's office. Page 2 of VTR-262 provides instructions on how to use the forms. Here are the highlights:
  • All heirs must sign the Affidavit.
  • Pay particular attention when there are surviving children whose parent is someone other than the surviving spouse.
  • The Affidavit may be used even when a deceased customer left a will IF a court determined that no administration is necessary. If this is the case, then the court document attesting to the same must be attached to the Affidavit.
Remember, a dealer always has the option of taking possession of the vehicle, writing off any remaining balance owed, and attempting to liquidate the vehicle. Probate matters can get messy, and sometimes the best way to avoid legal trouble down the road is to avoid dealing with such things in the first place.
 

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