Transferring a Vehicle as Executor in Ontario: Papers and Plates

A car, truck or motorcycle is often one of the first assets an executor has to deal with. It needs insurance, it may be sitting unused, and a beneficiary may want it. How the transfer works depends on whether there is a will and how the vehicle was owned.

This article explains the documents ServiceOntario generally asks for, the sales tax exemption, and what to expect with insurance and licence plates. Procedures can change, so confirm current steps with ServiceOntario.

Start with ownership and the will

First check whose name is on the vehicle ownership. How it was registered affects what happens next. How this applies to a vehicle in the deceased person's name alone depends on your situation, so it is worth confirming with a lawyer. If it was jointly registered, the rules below for joint owners apply. For Estate Administration Tax, jointly owned assets that automatically become assets of the surviving owner(s) are excluded from the estate's value.

Estate Administration Tax counts vehicles and vessels in the estate's value whether they are in or outside Ontario. Keep the value of the vehicle in mind when you add up the estate.

Also confirm who has the authority to act. If a named estate trustee declines or cannot act, the beneficiaries may nominate another person to act as estate trustee. If there is no will, the deceased's spouse or common-law partner usually has the first right to apply for a certificate of appointment. A common-law spouse may apply to administer the estate but does not inherit under the Succession Law Reform Act when there is no will.

Documents for a transfer to a beneficiary

A vehicle may be transferred to a beneficiary of the estate exempt from retail sales tax, if supporting estate documents are provided. The documents differ depending on whether there is a will.

A Small Estate Certificate can be applied for if the estate is valued at up to $150,000. Whether a certificate is needed for your estate depends on its assets, so confirm with a lawyer.

If the vehicle was jointly owned

If a vehicle is jointly registered to legally married spouses and one dies, the survivor can transfer it exempt from retail sales tax with only a death certificate or a certified copy.

In all other joint-ownership cases, including common-law spouses, the surviving owner must provide the estate documents to show they are the legal beneficiary before the vehicle can be transferred exempt from retail sales tax. This catches many families by surprise, since a common-law partner is treated differently from a married spouse here.

Insurance and licence plates

When a vehicle is registered to a new owner at ServiceOntario, proof of Ontario vehicle insurance is required. Arrange the new owner's insurance before the visit. Licence plates may be transferred only between spouses, parents and children, using a plate transfer declaration. A beneficiary outside those relationships will need other plates.

In the meantime, talk to the insurer about the existing policy and how the vehicle should be covered while it is parked or waiting for transfer. Do not let coverage lapse without checking. Safety certificate and other steps depend on the situation, so confirm them at ServiceOntario.

If you pay for insurance or storage out of your own pocket, a trustee may pay a proper expense from the trust property or pay it personally and recover it from the trust property.

What to do next

• Find the ownership and confirm whose name is on it.
• Confirm whether there is a will and who the beneficiary is.
• Gather the death certificate, the will or certificate of appointment, and a trustee letter with the VIN, year, make and model.
• Arrange insurance in the new owner's name.
• Ask ServiceOntario what else it needs, including any plate transfer declaration.
• Do not give the vehicle to a beneficiary before you know the estate's debts are covered.

Under a will, the estate is distributed once the assets have been liquidated and the funeral and burial expenses and any debts have been paid. If the estate may be short of money, speak with a lawyer before handing over a vehicle.

Tax matters too. Before distributing any property, the legal representative of a deceased taxpayer must obtain a clearance certificate from the Minister, confirming that all tax amounts have been paid or that security for them has been accepted. A legal representative who distributes property without the certificate is personally liable for the unpaid tax amounts, up to the value of the property distributed. How this applies to a single vehicle depends on your situation, so it is worth confirming with a lawyer or accountant.

Frequently asked questions