Each state sets out guidelines for changing vehicle title ownership in case of a divorce. Most states require that you handle title changes at a department of motor vehicles -- or similarly named state agency office. You must typically bring several documents, including a copy of the divorce decree. Some states, including Tennessee, require this document to reference the vehicle by its unique vehicle identification number or VIN. You'll also need the original certificate of title, showing the names of both prior owners. If the title has been lost, the owners must first apply for a duplicate title before deleting anyone from it.
Indicating Change of Ownership
The certificate of title will usually have a method of indicating the change of ownership. In Connecticut, for example, the reverse side of the form allows the owners to indicate change of ownership by having both sign on the appropriate line. If the title is held by a lender, the owner may release the title "for transfer purposes only." In other words, title cannot be transferred for the purpose of assigning the loan to someone else.
New Registration and Sales Tax
A state that levies sales tax on vehicles will require a declaration of value when a car is sold or transferred. If the change in title results from a divorce, however, the law may provide an exemption. In Connecticut, for example, the divorce decree must state that the court awarded the vehicle to the new single owner. If there were no divorce involved, and a couple was simply changing their joint ownership to one spouse, Connecticut would require the payment of sales tax on half of the vehicle's book value -- legally, the new sole owner is receiving half of the car he didn't previously own.
It's customary for states to require a new owner to file an application for registration of the vehicle. In Illinois, this form is known as an Application for Vehicle Transaction. In addition, the law will require proof of insurance for the new owner when registering a vehicle. An insurance company normally will allow other drivers to be covered under a single policy; one example would be if an ex-spouse -- who no longer appears on the title -- will be habitually using the vehicle. An odometer disclosure and a pollution check may also be required at this stage; California, for example, requires a "smog certification."