How to reduce/eliminate a parent’s potential liabilityif a child has an auto accident?

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How to reduce/eliminate a parent’s potential liabilityif a child has an auto accident?

My son is 20, a college student, and I support him. I provide a car titled in my name and covered by my insurance policy. We both live in NC, but different cities. I have excess liability coverage, but am still concerned about my liability should he have an accident. I spoke to my insurer about the implications of putting both the car and insurance in his name. The agent tells me that as long as he is a college student and I support him, this will not reduce my liability until he is 23. Is the agent correct, or are there additional actions I can take to reduce my liability?

Asked on January 10, 2011 under Accident Law, North Carolina

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You are wise to think ahead in this day and age of lawsuits.  The best way to protect your assets here is to make sure that you have very good coverage and umbrella insurance and to consider some estate planning.  By that I mean talking to a qualified planner about creating a trust and transferring your assets in to a trust for protection.  Depending on what you have and how you wish it to be held, a trust can be an invaluable tool against creditors, and those who sue in a lawsuit are potential creditors.  You could render yourself "judgement proof" and vastly limit your liability.  Good luck to you.


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