Automobile or Handicapped Van Purchase

Chris A. Milne Esq., Trustee, Milne Law Offices

Purchase of an Automobile by Beneficiary[1] of Supplemental Needs Trust

 

One of the most frequent requests for payment from a trust is for the purchase of an automobile including handicapped van.  All payments from your trust are at the sole discretion of the trustee.  Whether a vehicle will be purchased and the amount budgeted for the vehicle must be pre-approved by the trustee.  This purchase has the capacity to substantially enhance quality of life. However, the purchase of an automobile is a significant purchase and can unduly deplete your trust if not carefully and prudently considered.  You will be the owner of your vehicle and the trust will assert a lien through the Registry of Motor Vehicles for the amount paid directly to the seller towards the purchase of the vehicle by your trust.

You will need a valid driver’s license to purchase a car and need to provide the trustee proof of this before a car is purchased.  You will also need to show the car is necessary for transportation for work or necessary appointments and there is no less expensive means such as public transportation.  Keep in mind that a car is a very expensive purchase with the cost of an automobile includes: (1) The purchase price of the car, (2) Sales tax, (3) Cost of registration, (4) Insurance, (5) Ongoing cost of gasoline, and (6) Ongoing costs of maintenance and repairs.  Prior to considering purchase of a vehicle all of these cost must be detailed and an agreement on who will pay be reached.

In addition to the above, my office in performing the due diligence on the purchase of an automobile requires the following:

1.       A copy of a valid driver’s license for the beneficiary of the trust.

2.       Obtain Purchase and Sale Agreement from Dealership.

3.       Obtain a quote for liability and collision insurance on the vehicle and get agreement on who will be responsible to pay

4.       Make certain that if there is a trade-in that it is accounted for on the P&S.

5.       Search the year, make model and mileage of the vehicle on Kelly Blue Book – (you will get the FMV for dealership sales, as well as a listing of active sale ads for that type of vehicle).

6.       Run the VIN through Car Fax (many times the dealership will provide the Car Fax report for free).

7.       If approved, contact the dealership.

8.       Inform the dealership that “Chris A. Milne, as Trustee” must be added as a lienholder on the title.   Provide them with the DMV Lienholder Code: C35762, Named Lienholder “Chris A. Milne, as Trustee”, Address: “60 Centre Street, P.O. Box 722, Dover, MA  02030”, Phone Number “(508) 785-8300”.

9.       Ask the dealership for a copy of the title registration application once prepared to confirm CAM is added as Lienholder.

10.   Confirm with the dealership that they are actually filing the title documents, or whether they are providing the prepared application to the purchaser.

11.   Confirm with the dealership that they are contacting the insurance company to confirm the vehicle is insured before it is driven off the lot.

---

[1] For purchase by a parent as a necessity for a disabled child the parent/guardian will need to fulfill the requirements listed herein.