On July 1, 2025, South Dakota implemented a new estate planning option for South Dakota residents―owners of titled motor vehicles may now designate a beneficiary to receive the vehicle upon the owner’s death. South Dakota Codified Law (SDCL) §§ 32-3-80 through 32-3-84 outline the provisions for Transfer-on-Death (TOD) designations for these vehicles.
Transfer on Death Designations as an Estate Planning Tool
Designating a beneficiary on your vehicle title can be a simple and effective way to ensure that your car, truck, motorcycle, snowmobile, boat, ATV or other licensed vehicle passes to the person you choose upon your death. It can also save your loved ones time and money by avoiding the probate process.
South Dakota law requires a probate, a court-supervised process for gathering a deceased person’s estate assets, paying debts and distributing the remaining assets to the rightful heirs. However, the law allows collection by affidavit if the probate estate only contains personal property valued at $100,000 or less, or if real property valued at $50,000 or less.
South Dakota has long recognized TOD designations for bank accounts, real property, and investment accounts, and this new law extends that option to motor vehicles. When a vehicle’s title includes a valid TOD designation, the vehicle passes directly to the beneficiary without being included in the probate estate of the decedent. The beneficiary can be an individual, organization, or trust. When an estate’s assets are titled with TOD designations, the estate may be able to avoid the need for probate.
How it works
To set up a TOD designation, visit your county Treasurer’s Office, list your chosen beneficiary on the vehicle title as a TOD designation, and pay the $12.00 fee for a new title. All owners must be present with IDs to sign the application form. The vehicle must not have any open liens at the time of designation.
After the death of the owner (or the last survivor of a car held in joint tenancy with right of survivorship), the beneficiary submits an affidavit, along with the death certificate, to the Department of Revenue. The Department will then issue a new title in the beneficiary’s name.
Because this law has only been in place since July 1, 2025, your local county treasurer may want to contact the Department of Revenue for guidance to help you complete the application. When I requested a TOD designation for our vehicle, the person at the
window contacted a supervisor, and we worked through the process together. In this county, the treasurer also asked for the beneficiary’s driver’s license number or Social Security number.
Example
Jane and John Doe are married and jointly own a boat, with “or” between their names on the title. They go to the county treasurer’s office and request a TOD designation for their boat, naming Sally Doe as the beneficiary. They pay the required $12 transfer fee, and the Department of Revenue will issue a new title that reads:
JANE OR JOHN DOE TOD SALLY DOE
In this case, if Jane dies first, John becomes the sole owner of the boat. John can retitle the boat in his name, sell it, remove Sally as the beneficiary, or take any other action with the boat. Sally has no claim or interest in the boat. After John passes away, Sally will be the owner of the boat and should apply for a new title, submitting an affidavit and a death certificate to the Department of Revenue.
Tips and Considerations
Here are some important things to remember when planning how you want your vehicles to pass upon your death.
- Joint Ownership: When a vehicle is jointly owned, the language on the title is particularly important.
- The conjunction “or” between the names means that either owner can retitle, sell, or trade-in the vehicle without permission of the other owner. It also means that if one owner dies, the other owner or owners will own the vehicle alone. To remove the deceased person’s name from the title, you will need provide a death certificate.
- The conjunction “and” between the names means that each person owns a separate interest in the vehicle, and all names are required to retitle the vehicle for any reason. This means that when one owner dies, the interest must be conveyed to his or her heirs.
- Adding a Name to the Title vs. TOD Designation: If you decide to add a person’s name to the title of your vehicle (rather than a TOD designation) it might be considered as a gift of an interest in that asset. Also, creditors of the added person may consider the asset when they seek repayment of a debt. You should talk to your insurance agent about whether the added person is covered by the liability insurance. You should also talk with your CPA about any tax implications. If it a high-value vehicle like a truck, boat or camper, you may need to file a gift tax return.
- If the Beneficiary Predeceases the Owner: If the beneficiary dies before the owner, the TOD designation lapses, and the vehicle will become part of the owner’s estate.
- Insurance Considerations: SDCL § 32-3-84 specifies that the beneficiary gains ownership of the vehicle upon the owner’s death, so the beneficiary should immediately contact their insurance company after the owner’s passing.
Conclusion
While TOD designations can be a useful estate planning tool, it is important to consider all aspects before making a decision. If you have questions or would like assistance, our estate planning attorneys would be happy to guide you through the process and help ensure it fits into your overall estate plan.