When you’re going through a divorce, it’s easy to focus on the big-picture items like the house, custody arrangements, or retirement accounts. But something as simple as who keeps which vehicle, and how it’s handled legally, can have long-term financial consequences if not done correctly.
Whether you’re in the middle of a divorce or preparing for one, here’s what you need to know to divide vehicles fairly and avoid common pitfalls, especially if you’re divorcing in Georgia.
Why Dividing Vehicles Requires More Than Just a Verbal Agreement
You may think, “We’ve already decided who’s taking which car, so we’re good.” But simply agreeing isn’t enough. The legal and financial implications tied to car titles and auto loans can linger long after the divorce is finalized unless you take the right steps.
Here are the most important things to keep in mind:
1. Remove Your Name from the Title of the Vehicle You’re Not Keeping
If your spouse is keeping a vehicle, make sure your name is removed from the title. This protects you from liability and future issues, especially if something happens with the car or it’s involved in an accident.
Even if you trust your former spouse to handle the vehicle responsibly, your name being attached to it could come back to haunt you legally or financially.
2. Make Sure You’re Off the Auto Loan for the Vehicle You’re Not Keeping
This is just as important, if not more so. If you’re still listed on the loan for a car your ex is keeping, you’re still financially responsible for it. Late payments, defaults, or repossessions can damage your credit even if you haven’t driven the car in years.
What’s the solution? Your ex will need to refinance the vehicle loan in their own name. If refinancing isn’t an option, the vehicle may need to be sold, and they can start fresh with a new loan.
3. Georgia-Specific Tip: Transfer the Title Before the Divorce is Finalized
This is a big one if you’re divorcing in Georgia. Transfer the vehicle titles before the divorce is finalized to avoid paying ad valorem tax, which is based on the value of the vehicle.
Once your divorce is final, Georgia considers the transfer of a vehicle between ex-spouses as a regular sale. That means you may be taxed. But if the title is transferred before the final judgment, it’s considered part of the divorce process, and you can avoid unnecessary taxes.
Timing matters here, so don’t wait until after the final paperwork is signed.
Final Thoughts: Pay Attention to the Details
Cars might seem minor compared to other divorce issues, but mistakes with titles and loans can have serious consequences. The good news is, with a little planning and the right legal guidance, you can protect yourself from unexpected liability and financial setbacks.
Need Help With a Divorce?
If you’re working through a divorce in Georgia and want to make sure every detail is covered, especially when it comes to assets like vehicles, we’re here to help. We’ll guide you through each step to protect your interests and set you up for a clean start.
Schedule a discovery call to learn how we can support you through every stage of your divorce.
Jeanette Soltys, J.D., is a distinguished Georgia divorce attorney and a leading authority in alternative dispute resolution techniques such as amicable divorce. She obtained her Juris Doctor from Wake Forest University School of Law and is admitted to the bar in the state of Georgia. Additionally, she is a Certified Amicable Divorce Professional (CADP).