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Do I need to put the vehicles that my children drive, in their names in order to protect my assets?

Lafayette, LA |

My two college aged children are driving vehicles that are in my name. I was advised to put the insurance in their names which i've done. We have the max insurance coverage we could get. I couldn't buy an additional umbrella policy because there were too many speeding tickets between all members of my family. If they were in an accident in which the liability exceeded my insurance coverage would they come after my assets? Does it matter that I pay the insurance even though its in their names? Any advice would be helpful. Thank you

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Posted

Louisiana does not recognize the "family purpose doctrine" as described by another attorney who answered your question; so you would not be liable just based upon your ownership of the vehicle. But Louisiana does recognize the notion of "negligent entrustment". The key to your own exposure lies in the extent to which you would be found personally negligent or "at fault". If your children are both over 18 years of age, you would have no exposure for their personal negligence. But, as another attorney has answered, you would have exposure for your own negligence if you knew of some fact or condition which suggested that they should not be allowed to drive your vehicle, and where that fact or condition contributed to the accident, e.g. where they are prone to seizures, and where they had a seizure which caused the accident in question. Also, there is at least a possibility that some liability could attach to you as owner of the vehicle, if the accident was caused, not by driver error, but by a defect in the vehicle, e.g. the brakes failed to respond. If you are concerned about personal liability, and if you fear that your insurance limits are inadequate, you should consider putting the vehicles in the names of your children. That would shield you from any potential liability that might otherwise arise out of negligent entrustment or defect in the vehicle.

David Cook is an Attorney and Mediator licensed to practice law in the State of Louisiana. This response is not intended to be legal advice and does not create an attorney/client relationship. The response is intended to provide general information about the question presented; but since the question often fails to include significant and important facts that, if known, might significantly change the response, it is strongly recommended that the questioner promptly confer with an attorney in his or her own state in order to ensure that appropriate legal advice is timely received. DAVID S. COOK ATTORNEY • MEDIATOR 117 HEYMANN BOULEVARD, SUITE 12 POST OFFICE BOX 53394 LAFAYETTE, LOUISIANA 70505-3394 TELEPHONE: (337) 234-4155 CELL: (337) 288-6743 FAX: (337) 234-2937 EMAIL: davidscook@bellsouth.net To schedule a Mediation: http://www.nadn.org/david-sherman-cook To connect with David Cook on LinkedIn: http://www.linkedin.com/profile/view?id=104622386&trk=tab_pro <a href="https://twitter.com/DaveTheMediator" class="twitter-follow-button" data-show-count="false">Follow @DaveTheMediator</a> <script>!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");</script>

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Posted

I'm going to change ownership on the vehicles. My kids don't have any assets. I don't think negligent entrustment would be an issue as they are good kids. My husband and I and kids each have a speeding ticket and the limit was three in order to get a 2 million dollar umbrella policy. Its probably time for us to look at estate planning. Thank you for your very insightful comments.

Posted

Hopeful someone from Louisanna will jump in here, but in my opinion, most lawyers are interested in the known deep pocket of the insurance company. Going after your personal assets (at least in Texas) is a difficult road. However, if your family has multiple speeding tickets there is at least some evidence of disregard of the law, which coould be problematic.

Hope this helps. If you think this post was helpful, please check the asnwer was a good answer tab below. Thanks. Mr. Geffen is licensed to practice law throughout the state of Texas with an office in Dallas. He is authorized to handle IRS matters throughout the United States and is licensed to practice in US Tax Court as well as The Court of Claims. This answer is provided as a public service and as a general response to a general question, it is not meant, and should not be relied upon as specific legal advice, nor does it create an attorney-client relationship.

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Posted

In your scenario, the doctrine of negligent entrustment arises under Georgia law. Louisiana probably uses some form of this doctrine. In that situation, a party is liable if he entrusts someone with an instrumentality, with actual knowledge that the person to whom he has entrusted the instrumentality is incompetent by reason of his age or inexperience, or his physical or mental condition, or his known habit of recklessness.

In Georgia, when an automobile is maintained by the owner for the use and convenience of his family, such owner is liable for the negligence of a member of the family having authority to drive the car while it is being used for a family purpose. The "family purpose" doctrine applies so as to make the owner liable for the driver's negligence when these factors apply: 1) that person owns, has an interest in, or controls the automobile; 2) that person made the auto available for family use rather than for his business; 3) the driver must be a member of the immediate household; and 4) that person gave permission or acquiesced in the driver's operation of the auto. The most important of these is "authority and control."

Whether your assets are exposed is yet another state-specific question. Generally, it sounds as if you should speak to a licensed estate planning attorney in Louisiana to discuss asset protection strategies. Good luck and remember to mark which answer you feel was the best.

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