I was walking to a coffee shop today and saw this car driving down the road. The car was a 1965 Jaguar Type E Coupe. It passed me cruising slowly and then gently took a right turn and disappeared. It was a bit rainy today and the car was in pristine condition. The chrome shined and paint was magnificent. The rainy foggy day and that car fit perfectly as if it were at home on a London street. The owner of that car loves it. They put passion and care into its restoration and maintenance. It reminded me of some of my clients and the work I’ve done for them.
One recent client, whom I also consider a friend, has quite a few classic cars. They are some of his most prized possessions. They are more than cars to him, and they are more than investments. The value of the vehicles he owns has skyrocketed since he first purchased them. One was a gift passed down to him from his father. The family all glean enjoyment from their use from family outings to showings at car shows to a simple weekend drive to both enjoy the ride and show off the cars a little bit. I mean the growth in value of these vehicles are in the 1000’s of percent. Finding an investment that would keep pace with this type of growth in value would be nye impossible. My client and friend recently approached me about advising him on the best way to care for each vehicle and ensure its access to the family and that the vehicles easily stayed in the family while also allowing for my client to direct who gets what vehicle and the rules surrounding that transition. My answer was simple and one that I have been givig for a long time to my clients who have the good fortune of owning classic automobiles. The “Car or Auto Trust”.
What is an Auto Trust?
Answer: An Auto Trust is a specialized trust that specifically is designed to hold an automobile and allows the trust maker many options. The trust maker may desice he wants the collection to continue beyond his or her death and for the autos to be held for the use and enjoyment of the family while also allocating funds for the maintenance of these autos for the foreseeable future. The trust maker may want one or more of the autos to be spun off into separate sub-trusts upon the death of the trust maker and allow children or grandchildren to be in charge of the autos in these trusts. The child or grandchild may be granted permission to sell the auto(s) if they so choose if that is the desire of the trust maker. There can be many options to protect and control your most prized possessions for the use and benefit of your family if something happens to you. An auto trusts also avoids probate and the high costs and waiting periods associated with it. An auto trusts also gives an additional separation of liability and protection to the vehicles that have captivated our imaginations.
Why do I need an Auto Trust?
Answer: Beautiful simplicity just like the design of your car. Streamlined to fit your car perfectly and separate that asset. Isolating it and protecting it just like you would when parking your car in a crowded parking lot an Auto Trust allows you to set the rules for how your vehicle is handled if something were to happen to you. An idea might also be to set up an account or designate life insurance or another investment asset with the trust as the beneficiary to fund the trust with resources to care for the car for your family well into the future. You may wish a separate Auto Trust for each vehicle or of course we can design the Auto Trust to hold and pass all of your vehicles.
Why not put my vehicle in a general trust with all of my assets?
Answer: Liability!!! Like it or not, automobiles are deadly weapons and SHOULD NOT be placed in a trust with other investment and real estate assets. When placing an automobile in a general trust environment you expose your other assets to liability should there be a wreck or other accident.
If you would like to discuss crafting an auto trust for your prized auto or auto collection please contact me to set up a free consultation: 704-749-9244 or online at mcelderlaw.com.
Gregory S. McIntyre, J.D., M.B.A.
Estate Planning & Elder Law Attorney
1-888-999-6600
greg@mcelderlaw.com
