What Happens to a Car in a Divorce? Here Are the Answers.

Today we’re going to tackle a topic that is a little tougher to talk about. Usually, we talk about the nuts and bolts of vehicle registration, mainly how you can shelter your assets by registering out of state or getting a replacement car title without a bonded title. However, this is going to be far away from those topics. The topic is an ugly one that we don’t like to address, but it also needs to be addressed. 

The divorce rate has hovered around fifty percent for many years now, so we know that a solid chunk of our readers is dealing with it, have dealt with it, or eventually will deal with it. These are just statistical probabilities, not personal indictments. I went through an ugly divorce about fifteen years ago, and it never even dawned on me that it could or would happen to me. But it did, and it led to some rough times. It can lead you to rough times, too, so if you are determined to go through with a divorce, or it is inevitable, you need to arm yourself with as much information as possible.

Divorces are rarely civil affairs by nature; it is the dissolution of an intimate relationship. They get heated quickly and can take years to cool down (if ever). 

The 30,000’ view of a divorce is that it is dealt with in the same way as property law. So, the governing body, known as the domestic or family court, takes jurisdiction and sees marriage as more akin to a business relationship rather than an intimate one. The court is concerned with creating what it sees as an equitable - not necessarily equal - division of assets.

When it comes to cars and car titles in divorce proceedings:

• The court must transfer the car’s ownership if a divorce court is involved. At that point, you can no longer simply go to the DMV to assign ownership.

• Vehicles acquired before a divorce do not count as marital assets and are not divided during divorce proceedings.

• Similarly, assets tied to an LLC are exempt from divorce proceedings if the LLC was formed before the marriage.

An Important Caveat

Before we dig into the specifics here, we need to clarify this: we are not attorneys or divorce experts in the legal sense. 

I can tell you anecdote after anecdote about my experience dealing with the courts in my county and state. But even within a state, the courts behave differently from county to county. For example, in rural Kansas, where several counties are well under two thousand people, the courts are often judged by a magistrate who does not necessarily have a legal background. As a result, these courts will hear divorces much differently than in our most populous county, which sits just under 600,000. 

All of this is to say that we cannot begin to speak to what will happen to a car title during your divorce in specific terms; we must focus on common themes across the country. 

Does the Court Have to Be Involved?

Unfortunately, yes.

But there is a catch. 

Your domestic courts are probably backlogged unless you are in a tiny county. Most divorce cases are willing to work with each other begrudgingly to avoid the misery of dealing with the court (it is utterly miserable). Still, a select few cases drag each other back to court repeatedly. 

Here’s the bottom line: if you extend the olive branch to your soon-to-be ex and sort out property settlements together, bundle up the agreement in a nice package and present it to the judge without fuss, they will gladly rubber stamp it and send you on your way. They hate dealing with basketcases, so if you bring everything ready to go with no fuss, you will get whatever you two agreed to. The court doesn't care how equitable the agreement is as long as you agree. 

You still have to go to court, have the judge declare it, and sign the divorce decree, but it's a lot easier than showing up with no plan.

Awarding Cars: It's All About The Title

Property settlement is often a significant part of the divorce decree.

This wasn’t a significant part of my divorce because I was young (24) and broke. My only asset was a 1998 Camry, which the court awarded to my ex since she was unemployed. However, I had little stake in claiming that car as my own because she had titled it solely in her name when we moved from Texas to Kansas. 

So, if you think that a divorce is looming or on the horizon, you might want to check those titles and see how exactly they are titled. 

Why mention titles? Simple: if you hold a title, that vehicle is an asset. If you have a banknote and the bank holds the title, it is a debt. What does this matter to you? 

The court views property settlements in terms of assets and debts. Both are divided between the husband and wife, and the metric generally used is financial means. If one partner has been the primary breadwinner for years and holds a bunch of assets (i.e., vehicles with titles) in their hand, the court will probably award some of those to the other partner as an attempt to be equitable. 

The point is that your best course of action is to be fair and understanding and settle your property like adults, and that includes car titles. If that isn’t a possibility, then the court will do it for you. You might also want to think about selling assets off ahead of time to be safe. You may have to give up some cash in a settlement, but at least you will know where the vehicles went. But no matter what, the court will be involved, even if attorneys are not (no, you are not required to have attorneys; we are all allowed to represent ourselves pro se). 

Can’t I Just Go to the DMV? 

No sir, you cannot just go to the DMV, unless you and the ex are on amicable enough terms to do it together. But, again, this is best conducted before formal court filings. Everything goes at a standstill once divorce paperwork is filed. That does not mean that the agencies are talking to each other. 

But if there are already court filings in progress and your ex (or, far worse, your ex’s attorney) finds out that you are trying to swap out names on titles, you will be in for it. 

Once the court is involved, you will need to provide a court order (e.g., a divorce decree signed by the judge) to transfer ownership of a car title. The vehicle's title cannot be transferred without a court order if the divorce has made it to court.

So, in short: try to keep the power in your hands rather than putting it all in the hands of a third party. They are not there to agree with you. They are supposed to be there to distribute property. Not fairly, just what they consider to be equitable. There is a difference. If you want a fair distribution of assets, learn to get along with your ex before they are your ex, or be nice to them if they are on their way to being your ex. 

Are Cars & Vehicles Property?

Legally speaking, there are two categories of property: real property (real estate) and personal property. A car finds itself in the latter. 

More specifically, a car falls under the category of corporeal personal property. Not that it matters too much, but corporeal property is any tangible property you can hold. In contrast, the incorporeal property is a property you can only own in contemplation.

By this standard, everything in your household is legal property, and your vehicles are no exception.  

Since any vehicle is considered corporeal property, they will all get rolled into the property settlement. This includes vehicles with or without titles. And there is no way around this either, at least as long as your ex-spouse knows about the vehicle. 

We aren’t the morality police. 

You might attempt to get away with this deal if you own vehicles and assets that are not known to your spouse and remain unknown throughout the proceedings. Bear in mind, though, that your spouse can always take you back to court for cheating them out of the property in the settlement, and the court may not be all that thrilled with you. 

Again, we aren’t attorneys. You can do whatever you want but understand that if you hide assets instead of legally sheltering them, you can get turned into burnt toast. 

How Is Property Divided in a Divorce Settlement?

First, a caveat: this is NOT state-specific. There are sometimes radical differences in how courts handle the divorce process, even a few miles away from each other. However, some principles and phrases are universal and apply everywhere. Unless you can amicably work it out with your ex and get their signature AND a judge on a property settlement before they change their mind, you should strongly consider retaining legal counsel.

Property acquired during the marriage is considered marital property. Accordingly, anything acquired throughout the marriage is under the property settlement umbrella. That is unless you anticipated some sort of breakup and signed a prenuptial agreement.  

But there is one generic upside. Generally speaking, if you can prove ownership of the property before the marriage, that is not considered marital property. 

Did you own your Firebird before you got married? Can you prove it? If you can, you should be fine. 

However, that classic car collection you built while married to your dearly beloved? That’s going to get split up—bummer, dude. 

And here’s the kicker: if you thought that forming an LLC to shelter your assets (vehicles) would shield them from your ex, you are wrong. If you formed the LLC after you two tied the knot, sorry, those are marital assets.

What Happens to Collectible Cars in a Divorce Settlement?

The court does not care how much your cars mean to you. They don’t care that it cuts you to the core to part with a piece of your collection. There are assets and debts, and the court will parse them equitably.

Notice I did not say equally. This is not the goal of the court. And nobody knows what equitable means because it is a subjective concept. 

If you built your car collection during your marriage, the collection is a marital asset (most likely), and you will have to sell OR pay your spouse the value of their portion. However, if you are flush with cash, this might be a promising option, especially if you anticipate the value of the vehicles in the collection to grow. 

With this in mind, ensure you are getting the cars assessed at present market value and keep future valuations out of the equation. Look, anything goes in divorce court. A divorce court is routinely referred to as a kangaroo court; the statutory guidance on divorce is vague and incomplete, often leaving it up to judges to more or less legislate from the bench. 

What Happens When Your Ex’s Name Is on the Car Title?

This question goes back to the previous section on marital and non-marital property. 

If your ex bought the car after you were married and their name is on the title, it is marital property and is fair game in the property settlement. 

Conversely, if a car was owned before the marriage and it wasn’t specified in any prenuptial agreement, then it is the non-marital property and should remain with the person holding the title.

In short, stuff bought before marriage and owned by one person before marriage is non-marital and ostensibly off the table for property settlement negotiations. 

However, don’t think for a second that an aggressive attorney won’t make your life hell to try and get it from you.

Another Personal Anecdote

My ex-wife burned through quite a few attorneys and ended up with a real sleaze for a while. He wasn’t particularly cunning, but his strategy worked well: he would demand things that had no real bearing in the case or just bombard my attorney.

Well, every piece of correspondence between attorneys is billed at the hourly rate (standard practice). He just ran up MY bill while he was running up my ex’s in hopes of getting me to back off or go broke. It almost worked, too. 

The point is this: attorneys have a lot of ways of making you quit or give up without ever going to court. So be prepared for these tactics. Divorce can go from zero-60 quicker than a McLaren. 

The opposing counsel (your ex’s lawyer) might badger away at you and your counsel and demand things that are clearly off the table (non-marital property) because they expect you will inevitably concede to some degree. 

The rules are not set in stone. Instead, they are established in negotiations and, when those fail, in the courtroom. This is another reason I can’t guarantee anything for you from where I’m sitting, and most attorneys won’t, either.

How About if You Get a Car in the Settlement and Aren’t Given a Title?

Ok, assuming you have gone ahead with the divorce and the property settlement is signed off in the divorce decree, you get a car out of the deal. 

But here’s the catch: what if your ex doesn’t give you a title? What do you do if they can’t find it and don’t help obtain a replacement? Don’t expect them to be particularly helpful post-divorce.

One option is to use the court to enforce the title transfer and make the ex return the title or order a replacement. Expect this to take a solid two hours by your attorney, which at a rate of $250/hr (no, this is not an unusual rate) is $500. If it has to go to court, it will be an additional billed hour from your attorney, and you probably won’t get into court for about a month, maybe more. Know you are up to $750 plus any lost wages or time off from your work to attend the hearing, and the judge still might tell you that they can’t help or sort it out on your own. 

They might even see this as a red flag of things to come and order you to mediation. From my experience, this was another retainer of between $300-$800 on top of legal fees to your attorney. 

I wish I had exaggerated, but this happens daily in divorce court rulings. A simple request turns into a couple of grand in an afternoon when all you wanted was a replacement title. 

How Can You Avoid All This in the First Place?

From our end, Dirt Legal has two relevant services that might come in handy: one if you end up in a pinch during a divorce, and the other if you’re not even married yet.

Title Replacement

If a lost title is afoot, Dirt Legal offers you the solutions you need through our Vehicle Titling Services. Through our system, you can get a title on whatever you drive, whether it’s an aging classic or a late-model car.

You will be issued a transferable registration if your vehicle is more than fifteen years old. With this paperwork, you will have the legal paperwork you need to establish yourself as the proper, legal owner of the vehicle. Similarly, you will get a paper title for vehicles newer than fifteen years.

You may then take the documentation to your local DMV and transfer it to a title in your name, or you can keep the vehicle registered as-is; the choice is yours. 

Our car title replacement process is designed from the ground up to keep you in the driver’s seat and out of the DMV process.  Here’s what we’ll need from you to get your transferable registration or out-of-state title:

1. Select your vehicle year and registration options: This will determine the price for us to title your vehicle.

2. Checkout: Click Add to Cart and complete the checkout process. You’ll receive an email confirmation with your receipt and order number.

3. Vehicle information: Fill out the vehicle info form that appears after you check out. As long as you have a bill of sale and a Vehicle Identification Number (VIN), we can title any vehicle regardless of your state.

4. Documents: Keep an eye on your mailbox. We’ll send you a checklist for the materials we need to handle the service on your behalf, including your bill of sale, ID copy, notarized power of attorney, and sales tax (if not already paid).

5. Send it in: Mail everything to us using the pre-paid envelope we’ve provided to make it as easy as possible for you. Congrats, your part’s done! Now simply wait to receive your new vehicle ownership documents in the mail.

Protecting Your Assets

If you are not yet married, you are in a unique position. Remember how I mentioned that vehicles owned before marriage are generally not part of divorce proceedings and that property owned by a person’s LLC (business) isn’t either if that LLC was established before the marriage began?

Combine the two, and you have a solid option for sheltering your vehicular assets: forming an LLC that has nothing to do with any eventual marriage partner.

Going through a divorce is among the worst things that ever happened to me. One solution that can help separate assets before marriage is an LLC. It keeps them neat, legally tidy, and separated from marital assets. Since the process is date-stamped, it makes the argument much harder in favor of a potential ex-spouse attempting to stake claims on vehicles in an LLC. 

Dirt Legal’s Montana LLC Program will get you up and running with a Montana LLC and all your vehicles registered. Then, as your collection grows, so can the LLC, and we will help you with that, too. On top of that, a Montana vehicle registration is tax-free.

Don’t sit around waiting for life to happen. Instead, get your LLC up and running today so you are prepared for tomorrow.

As unpleasant as a divorce can be, I hope this article has given you some insight into the situation and your options when car and car titles get involved in divorce proceedings. Although we aren’t attorneys, if there is anything title-related, our services can assist you; the Dirt Legal team would be happy to help.