Detailed Answer
When administering an estate in California and handling a decedent’s vehicle loan, the administrator must confirm that the creditor has released its security interest in the vehicle. A fully satisfied loan triggers two key actions:
- Obtain a Payoff Statement and Lien Release from the Lender.
Contact the original lender or loan servicer and request a written payoff statement. This document should state the final amount due and the date of payoff. After payment, the lender must issue a lien release or satisfaction of security interest statement. Keep a copy for the estate records.
- Verify DMV Records for Lien Removal.
Under California Vehicle Code Section 5805, liens appear on the Certificate of Title: Cal. Veh. Code §5805. After the lender receives payment, it has 21 days to submit a release of lien to the California Department of Motor Vehicles (DMV).
- Order a title history or record search via the DMV website—ensure no active liens.
- Request a certified copy of the Certificate of Title showing lien release.
- Check the Secretary of State UCC Records.
For vehicles titled as personal property under the California Uniform Commercial Code, verify the termination of the security interest by searching UCC filings: Cal. Com. Code §9310. A UCC-3 termination statement confirms the lender has filed notice that the security interest is discharged.
- Retain All Documentation.
Maintain copies of the payoff statement, lien release, updated Certificate of Title, and UCC termination statement in the estate file. These safeguards prevent future title disputes and confirm that the estate is free to transfer or dispose of the vehicle.
Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Helpful Hints
- Request payoff quotes in writing to avoid discrepancies.
- Track all deadlines: lenders and DMV have specific timeframes for release filings.
- Use DMV’s online portal for faster title history searches.
- Retain certified copies of all public filings.
- Consult an estate attorney for complex estates or disputes.