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Divorce can create retitling challenge

Reposted Arizona Republic column.

Divorce can create retitling challenge

From time to time, I work with clients facing challenges from asset-titling issues in previous divorces. In a divorce, assets are usually divided between the spouses, resulting in retitling of assets into a spouse’s sole name and updating beneficiaries after the divorce. One problem arises when a divorce decree does not adequately describe the asset being awarded to a spouse and the former spouse later refuses to cooperate in retitling or selling that asset.

Recently, a vehicle, which at the time of the divorce was jointly titled, was awarded to one spouse. The divorce decree referred only to “1990 Toyota Four Runner” and made no mention of the year or vehicle identification number.

The spouse awarded title to the vehicle attempted to sell it. The former spouse refused to sign the title and the Motor Vehicle Division refused to transfer title because the vehicle was so vaguely described in the decree. To solve this problem, the spouse awarded the vehicle needs to file a motion with the court to amend the decree to specifically describe the vehicle by year and vehicle ID number so that the Motor Vehicle Division will place it in the spouse’s own name.

The repercussions of poorly drafted divorce decrees are felt in many areas, including estate planning.

The most common impact is on clients creating a living trust where the goal is to retitle assets, known as funding, into the name of the trust. Assets held in joint names of former spouses can’t be retitled.

I strongly suggest that the drafters of divorce decrees identify assets as specifically as possible in order for the asset to be sold or retitled without the cooperation of the former spouse.

From the Arizona Republic 03/21/2014, Page B05 – by Attorney Louis Silverman

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FAQ: I am buying a used car. How can I find out if it has a lien against it?

The MVD has a resource to assist you with one step of the used car buying adventure: Lien Motor Vehicle Check !

If you are in the market for a used car or you’re thinking of selling your car, there’s a new resource to help ensure there is not a lien on the car you’ve got your eye on.

Vehicles with liens are often sold without a lien listed on the title, this is because the vehicle was acquired prior to a lien being placed so the title the seller has is clean.  The lien will show up once the vehicle is sold and the new owner tries to title it in their name. The lien must be paid prior to the vehicle being titled in the new owners name.

Scroll to the bottom of this blog if you have purchased a vehicle with a lien.

What types of liens can be placed on a motor vehicle title? Liens fall into two general categories…

  • Financial liens will appear on the front of the title in the space marked, “Lienholders.” These liens are generally for a defined period of time and when paid/satisfied, the vehicle owner receives a “lien release.” The owner may take that lien release to an MVD or Authorized Third Party office to obtain a new title (or, the vehicle owner may give the buyer the signed and notarized title with a lien release from the lender).
  • Unresolved financial obligations can be added electronically and are not shown on the title as financial liens are. Unresolved financial obligation liens are not for a defined period of time and can be added or deleted at any time – think child support liens or court fines/fees (operation of law liens). These must be paid before the title can be transferred.

Anyone buying a used vehicle should visit the Lien Motor Vehicle Check prior to making the final sale, at this time it is $1.50 per search:   https://servicearizona.com/webapp/lienmvr/search?execution=e1s1

AZ MVD – Vehicle Lien FAQ’s https://servicearizona.com/applicationFAQ/lienmvr

You may be able to request a hearing from the Arizona Department of Transportation if you purchased a vehicle and later found out about a lien on it. The hearing officer will determine if you qualify to title the vehicle in your name without paying the previous owner’s lien. Below is how to request the hearing pursuant to Arizona Administrative Code (AAC) R17-1-502.

R17-1-502. Request for Hearing

Form for requesting a hearing http://www.azdot.gov/docs/default-source/mvd-forms-pubs/40-5009.pdf?sfvrsn=4

A. A petitioner or petitioner’s attorney shall file a request for a hearing:

1. By mail or hand delivery to the Executive Hearing Office’s street address:

Executive Hearing Office, Arizona Department of Transportation, Motor Vehicle Division, 3737 N. 7th St., Suite 160, Phoenix, AZ 85014-5017;

2. By fax to (602) 241-1624; or

3. By e-mail to the Executive Hearing Office’s electronic mail address: hearingoffice@azdot.gov; and

4. Timeliness of filing is determined as of the date the Executive Hearing Office receives a request for hearing.

B. A request for hearing shall be submitted to the Executive Hearing Office within 15 days of the date of an agency action notice.

C. A request for a hearing shall include the petitioner’s name, mailing address, and telephone number.

Visit the Secretary of State’s website for further AAC’s regarding the administrative hearing process.

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