In years gone by, people typically bought a car and drove that car until it died a natural or unnatural death.  They then started the process all over again by purchasing another new or used car.  This is often no longer the case as we live in a society where everyone wants to keep up the best appearance.  As a result, many people want to drive only the newest or best vehicle available complete with all the latest gadgets, and therefore buy or lease a new car every few years.  People look at the advantages of leasing a car, and decide that leasing is the right choice for them.  These advantages include:  lower monthly payments, no repair costs, low maintenance costs, tax benefits, driving a new car every couple of years, greater choice of vehicles (as you not concerned with car longevity), and less money paid out up front.

As a result, today more and more people pass away, leaving behind a leased car as part of the estate.  That leased car and its monthly payments now have to somehow be dealt with, along with the myriad of other decisions regarding the various assets of the estate.  What do you do if you become the executor of an estate that includes a car still under a lease agreement?

Handling the Details of a Car Lease after a Death

As a vehicle lease is a contract, the first thing you, as the executor of the estate, should do is review the terms of the vehicle lease.  The lease may deem death to be an early termination of the lease. In which case, any payment arrangements may continue.  If the lease has a co-signer, then he or she may ultimately become liable for all future payments.  If not, then those payments will probably become the responsibility of the deceased’s estate.

While you review the lease and any rights or obligations the estate may have, be sure to keep up any and all lease payments.  Failing to make those payments may limit your future options regarding the vehicle.  This is especially true if you or another individual in the family want to take over the vehicle and its lease.

It is also a good idea to talk with an attorney to determine if the estate is liable for the remaining monthly payments.  It is possible that an alternative agreement can be reached between the two parties (the estate and the leasing company).  The contract may include clauses regarding additional fees for processing repossession paperwork, cutting new keys, or reconditioning charges.  Some companies have provisions that allow estate executors to simply pay one flat fee and stop all lease payments after the borrower passes away.

You should notify the dealership or leasing agency as soon as possible regarding the death of the lessee.  The company will likely want proof of the death of the lessee (probably in the form of a death certificate) as well as documentation indicating that you are legally authorized to act on behalf of the estate.


The first option is to either pay out the lease or come to an agreement with the lease company to return the car and pay any outstanding fees.  Alternatively, the lease can possibly be transferred to another person, perhaps another family member who would like to have the car.  While there may be a transfer fee charged by the dealer for transferring the lease to another family member, this option can decrease any outstanding claims that the creditor has against the estate.  As a result, more assets can be passed along to the beneficiaries.


Remember that any funds that are due to the leasing company should be paid from estate funds, and not from the executor’s personal account.  This is true unless an agreement is made that one of the beneficiaries of the estate assumes the car lease.