"Asset Protection" for young teenage driver in the household

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
User avatar
TxAg
Posts: 1809
Joined: Sat Oct 17, 2009 11:09 am

Re: "Asset Protection" for young teenage driver in the household

Post by TxAg »

galawdawg wrote: Fri Sep 03, 2021 8:20 am
mathwhiz wrote: Thu Sep 02, 2021 8:52 pm So if I have $3M in taxable and get $3M in umbrella, what's stopping from the insurance company tendering limits and the lawyer going onto the next target, i.e. me? Especially with a kid involved and a sympathetic jury, why not get the full $6 Million judgment or is the insurance company going to force the attorney to waive the right to sue me as part of the settlement?
BF3000 wrote: Thu Sep 02, 2021 8:47 pm OP, why pay 3x your taxable net worth for umbrella? I think you are overthinking this. Why not 1x? And it is not a complex strategy about hiring lawyers to drag out a lawsuit to keep sharks at bay. Suppose you goofed, swerved over the center line, and rendered a 5-year-old child a quadriplegic and killed his mom. Suing you for a lot of money would be a legitimate claim—not ambulance chasing—but the plaintiff would have no incentive to reject the policy limits if your accessible net wealth equaled your policy limits.
And if you have $3m in taxable and get $10m in umbrella, what's stopping from the insurance company tendering limits and the lawyer going onto the next target, i.e. you?

You could certainly fret and wring your hands and worry about those kind of catastrophic situations. But the reality is that all you can do is take reasonable measures to protect your assets, make reasonable decisions about the purchase of umbrella insurance, and take reasonable precautions to ensure, to the best of your ability, that risks of such a significant and catastrophic loss are minimized.

Only you know your teen and his level of maturity, responsibility, trustworthiness and judgment. It will be YOUR car he drives. If you aren't certain that he will exercise wise decision-making concerning his operation of your car, then don't permit him to do so. Set certain zero tolerance policies: no alcohol or drug use...period. No reckless driving or excessive speed...period. Driver and passengers always seat belted...period. Complete honesty concerning the use of the vehicle...period. Things like that. And then trust, but verify. Don't be hesitant to monitor your teen's driving. His right to privacy ends when you entrust him with the possession and operation of your vehicle. There are apps and other methods for doing this. If your teen says he is going to the library to study, drive by the library and make sure the car is in the parking lot.

If there is an issue, address it immediately with appropriate vehicle-related consequences. Be the parent....don't give in to the social pressures to be his "friend" and worry about whether other kids or parents will think you too strict, rigid or controlling. Take it from me...we raised three. The peer pressure among parents can be brutal but DW and I weren't on Facebook or other social media, we didn't make parenting decisions based upon what "everyone else" was doing, and we frankly didn't care what other parents thought about how we raised our kids. And believe it or not, we had a couple of parents who had the nerve to comment about our decisions, things like "________ said you won't let him drive for a month because he got a speeding ticket....that's pretty harsh. How is he going to get to school or hang out with his friends?" (Transport to school is taxpayer funded...it's called a SCHOOL BUS! And if his friends want to "hang out" they can come and pick him up or he can walk...not my problem to solve. Our son can figure it out.)

When I was a DA, I had to periodically send seventeen and eighteen year olds to prison for years for DUI caused fatality wrecks. I also went to scenes where the at-fault teen driver and his/her friends were all deceased in a wrecked vehicle because the driver was driving recklessly and failed to negotiate a curve or crossed the center-line and struck another vehicle. In many of those cases, these teen drivers were irresponsible kids, had a history of drug or alcohol use, or had other moving violations on their short driving histories. And yet, at least half of them were driving new or barely used expensive vehicles that Mom and Dad bought for junior because "all kids drink/smoke weed/drive too fast and _________ is really a good kid, he deserves a nice car/truck."

Forgive me if I am going too far into the "parenting advice" spectrum, but the best way to reduce the risk that concerns you is to reduce the likelihood of a serious injury or fatality wreck. IMO that requires oversight, supervision and matching permitted vehicle use with demonstrated levels of personal responsibility and trustworthiness.

Good luck!

Solid post. This deserves to be read twice.
User avatar
White Coat Investor
Posts: 15391
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: "Asset Protection" for young teenage driver in the household

Post by White Coat Investor »

mathwhiz wrote: Thu Sep 02, 2021 7:46 pm Our son is approaching the age when he can apply for his learners permit and we are very concerned about protecting our assets if he gets into an at fault accident.

So the basics is we have a lot of money in "protected" assets from creditors and Florida is a very friendly state for asset preservation from lawsuits. Our ROTH's, 401k's, pensions, Homestead property. All protected and untouchable from my understanding.

That still leaves a 7 figure taxable portfolio that is a target. I could jack up the umbrella to millions but that won't stop an attorney from suing for everything if our son does something abominably stupid like kill someone drinking and driving. The premiums would also be very expensive.

So I'm interested in more advanced asset preservation options such as trusts and other structures that make these assets airtight from potential creditors.

Anyone have this experience and have suggestions?
Insurance is your first line of defense. Buy that first. It's far cheaper than the stuff you're thinking about and works a whole lot better. You want it to be enough that the family and attorney feel like they got a lot. Then protect whatever assets you can in your state using things like homestead laws, tenants by the entirety titling, maxing out retirement accounts, Roth conversions etc. Then and only then consider advanced asset protection options.

Remember nothing is "airtight".

You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
bds3
Posts: 47
Joined: Mon Dec 19, 2016 8:02 pm

Re: "Asset Protection" for young teenage driver in the household

Post by bds3 »

I didn’t read every reply but several suggested titling the car solely in the kid’s name and getting them a separate insurance policy and bing bang boom problem solved. This was my plan too until my attorney advised me with 100% certainty it wouldn’t work even a little bit for asset protection. Basically if the kid can be considered a dependent (even if you don’t claim him/her as such on your taxes), ie if they live in your house, or are in college and you pay their tuition, then you will still be responsible/liable for their actions.

May vary by state.
Hogan773
Posts: 650
Joined: Thu May 07, 2015 11:14 am

Re: "Asset Protection" for young teenage driver in the household

Post by Hogan773 »

This is all very interesting to me, thanks

On the topic of umbrella - is there a general level at which basically any car accident would really not qualify for the opposing lawyers to "try for more"?

Let's say I had $10mm in overall assets - half of which was in IRAs and the rest in taxable. First, does that mean that my max target amount for the lawyers would be $5mm because they can't go after the IRAs? Or no? Now lets say I had $20mm with only $5mm in IRAs. With $15mm in taxable in that scenario, is there a realistic accident where the lawyers would turn down a $2mm or $3mm umbrella policy and then try to sue to grab all that $15mm? I'm not sure what accident could cause such an amount....maybe if my son hits a busload of Neurosurgery Residents and you are trying to compensate them for a whole life of income not to be earned?

I think I asked some of these questions a while back and I must have gotten myself comfortable that a few million umbrella should cover any conceivable accident scenario and thus it mattered less what one's total net worth is in comparison, but maybe I should up my umbrella more once my son starts driving
danaht
Posts: 680
Joined: Sun Oct 18, 2015 11:28 am

Re: "Asset Protection" for young teenage driver in the household

Post by danaht »

Hogan773 wrote: Fri Sep 10, 2021 11:37 pm This is all very interesting to me, thanks

On the topic of umbrella - is there a general level at which basically any car accident would really not qualify for the opposing lawyers to "try for more"?

Let's say I had $10mm in overall assets - half of which was in IRAs and the rest in taxable. First, does that mean that my max target amount for the lawyers would be $5mm because they can't go after the IRAs? Or no? Now lets say I had $20mm with only $5mm in IRAs. With $15mm in taxable in that scenario, is there a realistic accident where the lawyers would turn down a $2mm or $3mm umbrella policy and then try to sue to grab all that $15mm? I'm not sure what accident could cause such an amount....maybe if my son hits a busload of Neurosurgery Residents and you are trying to compensate them for a whole life of income not to be earned?

I think I asked some of these questions a while back and I must have gotten myself comfortable that a few million umbrella should cover any conceivable accident scenario and thus it mattered less what one's total net worth is in comparison, but maybe I should up my umbrella more once my son starts driving
Depending on the state - the assets in the IRA may or may not be protected from bankruptcy protection and other lawsuiits. If you are worried about this - you might want to think about transferring the IRA assets to a 401k where they should be untouchable from most lawsuits. You could then get an umbrella policy to help protect what is in the taxable account.
Hogan773
Posts: 650
Joined: Thu May 07, 2015 11:14 am

Re: "Asset Protection" for young teenage driver in the household

Post by Hogan773 »

danaht wrote: Fri Sep 10, 2021 11:59 pm
Hogan773 wrote: Fri Sep 10, 2021 11:37 pm This is all very interesting to me, thanks

On the topic of umbrella - is there a general level at which basically any car accident would really not qualify for the opposing lawyers to "try for more"?

Let's say I had $10mm in overall assets - half of which was in IRAs and the rest in taxable. First, does that mean that my max target amount for the lawyers would be $5mm because they can't go after the IRAs? Or no? Now lets say I had $20mm with only $5mm in IRAs. With $15mm in taxable in that scenario, is there a realistic accident where the lawyers would turn down a $2mm or $3mm umbrella policy and then try to sue to grab all that $15mm? I'm not sure what accident could cause such an amount....maybe if my son hits a busload of Neurosurgery Residents and you are trying to compensate them for a whole life of income not to be earned?

I think I asked some of these questions a while back and I must have gotten myself comfortable that a few million umbrella should cover any conceivable accident scenario and thus it mattered less what one's total net worth is in comparison, but maybe I should up my umbrella more once my son starts driving
Depending on the state - the assets in the IRA may or may not be protected from bankruptcy protection and other lawsuiits. If you are worried about this - you might want to think about transferring the IRA assets to a 401k where they should be untouchable from most lawsuits. You could then get an umbrella policy to help protect what is in the taxable account.
Oh good. I said IRA but actually much more is still in 401k as I am still working. I have some in a Roth IRA I have been backdooring for many years but not a huge amount.

So I am still a little confused on the umbrella. Is it enough to just get a decent umbrella like 2 to 3 million even if you have more in taxable? I just don't know how high damages can really go in car accidents. If the opposing side gets an offer for full insurance limits of say 3 million and taxable is also 3 million then I can see that they wouldn't deny that because passing over 3 million and trying to then win 3 million wouldn't make sense. But what if you had 7 million or 15 million or 25 million. Are there realistically car accidents where someone can successfully make the case that they deserve 25 million? And if so would the lawyers then go for it and bypass the insurance?
Leesbro63
Posts: 7269
Joined: Mon Nov 08, 2010 4:36 pm

Re: "Asset Protection" for young teenage driver in the household

Post by Leesbro63 »

scorcher31 wrote: Thu Sep 02, 2021 9:25 pm My thought is once my child is 18 their car will be solely titled in their name and their insurance will be a separate policy just for them. I would assume that would protect the parents. Perhaps just allow them to drive with you when 17.
My kids are fully grown and on their own now. But I thought this too and was told differently here on Bogleheads, way back. I believe I was told that as long as you are supporting your kids, especially through undergraduate college, you can possibly be connected as the deep pocket if your kid harms someone with even "his" or "her" car. I relied on Umbrella Insurance and, fortunately, never had to test if it worked. As soon as my kids graduated from college, however, I retitled their cars into their own names and had them get their own insurance. There was a period during my son's grad school where I was supporting him and he lived with me, but with his own car and car insurance. I'm not sure if I could have been dragged into it if he had caused harm, but again this never had to be tested. Fortunately we all survived that period, as did my assets, and now I have more ability to focus my worries about lots of other stuff :? .
Last edited by Leesbro63 on Sat Sep 11, 2021 8:54 am, edited 3 times in total.
ncbill
Posts: 1146
Joined: Sun Jul 06, 2008 4:03 pm
Location: Western NC

Re: "Asset Protection" for young teenage driver in the household

Post by ncbill »

Hogan773 wrote: Sat Sep 11, 2021 7:47 am
danaht wrote: Fri Sep 10, 2021 11:59 pm
Hogan773 wrote: Fri Sep 10, 2021 11:37 pm This is all very interesting to me, thanks

On the topic of umbrella - is there a general level at which basically any car accident would really not qualify for the opposing lawyers to "try for more"?

Let's say I had $10mm in overall assets - half of which was in IRAs and the rest in taxable. First, does that mean that my max target amount for the lawyers would be $5mm because they can't go after the IRAs? Or no? Now lets say I had $20mm with only $5mm in IRAs. With $15mm in taxable in that scenario, is there a realistic accident where the lawyers would turn down a $2mm or $3mm umbrella policy and then try to sue to grab all that $15mm? I'm not sure what accident could cause such an amount....maybe if my son hits a busload of Neurosurgery Residents and you are trying to compensate them for a whole life of income not to be earned?

I think I asked some of these questions a while back and I must have gotten myself comfortable that a few million umbrella should cover any conceivable accident scenario and thus it mattered less what one's total net worth is in comparison, but maybe I should up my umbrella more once my son starts driving
Depending on the state - the assets in the IRA may or may not be protected from bankruptcy protection and other lawsuiits. If you are worried about this - you might want to think about transferring the IRA assets to a 401k where they should be untouchable from most lawsuits. You could then get an umbrella policy to help protect what is in the taxable account.
Oh good. I said IRA but actually much more is still in 401k as I am still working. I have some in a Roth IRA I have been backdooring for many years but not a huge amount.

So I am still a little confused on the umbrella. Is it enough to just get a decent umbrella like 2 to 3 million even if you have more in taxable? I just don't know how high damages can really go in car accidents. If the opposing side gets an offer for full insurance limits of say 3 million and taxable is also 3 million then I can see that they wouldn't deny that because passing over 3 million and trying to then win 3 million wouldn't make sense. But what if you had 7 million or 15 million or 25 million. Are there realistically car accidents where someone can successfully make the case that they deserve 25 million? And if so would the lawyers then go for it and bypass the insurance?
IRA assets are federally protected under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”)...but only in bankruptcy (i.e. you have to file)

Protections differ, e.g. rollover IRAs are protected in any amount, but contributory IRAs only up to $1,362,800 (ending April 1, 2022)...that amount is adjusted for inflation every 3 years.

I read the above as you don't want to add funds to a rollover IRA...open up a different IRA to protect the entire amount you rolled over from a previous employer's 401(k), 403(b), etc.

https://www.rosenblattlawfirm.com/blog- ... an-assets/

Outside of bankruptcy state law applies...in my state any type IRA of any amount (including inherited & Roth) is protected from creditors.

I simply added an umbrella policy when my kids got their driver's license at age 16...my state only permits insurers to penalize drivers for their first 3 years no matter when they start driving, so IMHO there's no point in making them wait until age 18.
Last edited by ncbill on Sat Sep 11, 2021 8:56 am, edited 5 times in total.
Leesbro63
Posts: 7269
Joined: Mon Nov 08, 2010 4:36 pm

Re: "Asset Protection" for young teenage driver in the household

Post by Leesbro63 »

Brianmcg321 wrote: Thu Sep 02, 2021 8:25 pm That's why you give your kid a beater to drive. A faded out 10 yr old civic will do. Then if they are in an accident, and you come to the scene to pick them up, be sure to drive the crummiest car you can. And wear an old worn out t-shirt with holes. Borrow a friends farm truck or their kids beater.
This is silly thinking. It may be that having your kids drive beaters makes sense, but not for this reason. Any good lawyer for a badly injured plaintiff is gonna dig deep to find out who has what. And it is super simple these days.

All of that being said, and somewhat contrary to that, I purposely do not title my vehicles in the name of my Revocable Living Trust. I don't want every vehicle transaction (accidents, tickets, repairs, new car buying, state inspections) to advertise "TRUST FUND DRIVER". I'm in Pennsylvania and we don't have TransferOnDeath car titles. But so be it...if my heirs have hassle with probate just for my car so I can avoid advertising "TRUST FUND DRIVER", it's worth it, so be it.

So on the one hand, acting poor probably won't prevent you from getting sued. But advertising that you have a "Trust Fund" isn't too smart either.
ncbill
Posts: 1146
Joined: Sun Jul 06, 2008 4:03 pm
Location: Western NC

Re: "Asset Protection" for young teenage driver in the household

Post by ncbill »

Leesbro63 wrote: Sat Sep 11, 2021 8:49 am
Brianmcg321 wrote: Thu Sep 02, 2021 8:25 pm That's why you give your kid a beater to drive. A faded out 10 yr old civic will do. Then if they are in an accident, and you come to the scene to pick them up, be sure to drive the crummiest car you can. And wear an old worn out t-shirt with holes. Borrow a friends farm truck or their kids beater.
This is silly thinking. It may be that having your kids drive beaters makes sense, but not for this reason. Any good lawyer for a badly injured plaintiff is gonna dig deep to find out who has what. And it is super simple these days.

All of that being said, and somewhat contrary to that, I purposely do not title my vehicles in the name of my Revocable Living Trust. I don't want every vehicle transaction (accidents, tickets, repairs, new car buying, state inspections) to advertise "TRUST FUND DRIVER". I'm in Pennsylvania and we don't have TransferOnDeath car titles. But so be it...if my heirs have to put only my car through probate so I can avoid advertising "TRUST FUND DRIVER", it's worth it.

So on the one hand, acting poor probably won't prevent you from getting sued. But advertising that you have a "Trust Fund" isn't too smart either.
Maybe not...IIRC we had a personal injury attorney here on the forum point out, at least where they practice, they can't question a defendant about their assets until after the plaintiff obtains a judgment via trial...all the plaintiff & their lawyer know upfront are the insurance limits.

Remember, public information such as real estate really isn't a good proxy for assets available to satisfy a judgment...e.g. here such is automatically titled as tenancy by the entirety for couples and so is fully protected from creditors where only one owner is being sued.
Leesbro63
Posts: 7269
Joined: Mon Nov 08, 2010 4:36 pm

Re: "Asset Protection" for young teenage driver in the household

Post by Leesbro63 »

ncbill wrote: Sat Sep 11, 2021 9:03 am
Leesbro63 wrote: Sat Sep 11, 2021 8:49 am
Brianmcg321 wrote: Thu Sep 02, 2021 8:25 pm That's why you give your kid a beater to drive. A faded out 10 yr old civic will do. Then if they are in an accident, and you come to the scene to pick them up, be sure to drive the crummiest car you can. And wear an old worn out t-shirt with holes. Borrow a friends farm truck or their kids beater.
This is silly thinking. It may be that having your kids drive beaters makes sense, but not for this reason. Any good lawyer for a badly injured plaintiff is gonna dig deep to find out who has what. And it is super simple these days.

All of that being said, and somewhat contrary to that, I purposely do not title my vehicles in the name of my Revocable Living Trust. I don't want every vehicle transaction (accidents, tickets, repairs, new car buying, state inspections) to advertise "TRUST FUND DRIVER". I'm in Pennsylvania and we don't have TransferOnDeath car titles. But so be it...if my heirs have to put only my car through probate so I can avoid advertising "TRUST FUND DRIVER", it's worth it.

So on the one hand, acting poor probably won't prevent you from getting sued. But advertising that you have a "Trust Fund" isn't too smart either.
Maybe not...IIRC we had a personal injury attorney here on the forum point out, at least where they practice, they can't question a defendant about their assets until after the plaintiff obtains a judgment via trial...all the plaintiff & their lawyer know upfront are the insurance limits.

Remember, public information such as real estate really isn't a good proxy for assets available to satisfy a judgment...e.g. here such is automatically titled as tenancy by the entirety for couples and so is fully protected from creditors where only one owner is being sued.
Agreed. That being said, it’s pretty easy to get an idea as to who might be a “deep pocket”. Driving a beater car isn’t gonna cause someone badly injured, or their attorney, to shrug and dismiss looking for potential dollars.
MikeG62
Posts: 3809
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: "Asset Protection" for young teenage driver in the household

Post by MikeG62 »

Hogan773 wrote: Sat Sep 11, 2021 7:47 am
danaht wrote: Fri Sep 10, 2021 11:59 pm
Hogan773 wrote: Fri Sep 10, 2021 11:37 pm This is all very interesting to me, thanks

On the topic of umbrella - is there a general level at which basically any car accident would really not qualify for the opposing lawyers to "try for more"?

Let's say I had $10mm in overall assets - half of which was in IRAs and the rest in taxable. First, does that mean that my max target amount for the lawyers would be $5mm because they can't go after the IRAs? Or no? Now lets say I had $20mm with only $5mm in IRAs. With $15mm in taxable in that scenario, is there a realistic accident where the lawyers would turn down a $2mm or $3mm umbrella policy and then try to sue to grab all that $15mm? I'm not sure what accident could cause such an amount....maybe if my son hits a busload of Neurosurgery Residents and you are trying to compensate them for a whole life of income not to be earned?

I think I asked some of these questions a while back and I must have gotten myself comfortable that a few million umbrella should cover any conceivable accident scenario and thus it mattered less what one's total net worth is in comparison, but maybe I should up my umbrella more once my son starts driving
Depending on the state - the assets in the IRA may or may not be protected from bankruptcy protection and other lawsuiits. If you are worried about this - you might want to think about transferring the IRA assets to a 401k where they should be untouchable from most lawsuits. You could then get an umbrella policy to help protect what is in the taxable account.
Oh good. I said IRA but actually much more is still in 401k as I am still working. I have some in a Roth IRA I have been backdooring for many years but not a huge amount.

So I am still a little confused on the umbrella. Is it enough to just get a decent umbrella like 2 to 3 million even if you have more in taxable? I just don't know how high damages can really go in car accidents. If the opposing side gets an offer for full insurance limits of say 3 million and taxable is also 3 million then I can see that they wouldn't deny that because passing over 3 million and trying to then win 3 million wouldn't make sense. But what if you had 7 million or 15 million or 25 million. Are there realistically car accidents where someone can successfully make the case that they deserve 25 million? And if so would the lawyers then go for it and bypass the insurance?
IANAL, but there have been some lawyers who have responded to threads like this over the years and as I recall it is quite difficult for a plaintiff's lawyer to find out what your exposed assets are. So, assuming that is the case, and with an umbrella of several million dollars, it seems like one would be reasonably well protected.

I posted this previously, An aunt of my brother-in-law was killed in an auto accident (husband was seriously injured and required multiple surgeries to be able to walk again). Owner of the vehicle was apparently an uber wealthy family (think old money) and driver was boyfriend of owners daughter. Case settled before completion of the jury trial (but well down that path) at $5 million. Four million went to husband for loss of spouse and pain and suffering and $1 million went to their only son for loss of mother. Both the woman who died and her husband were retired. I believe this was all paid for out of insurance (but I was not that close to the details beyond what I've said).
Real Knowledge Comes Only From Experience
oldfort
Posts: 2756
Joined: Mon Mar 02, 2020 8:45 pm

Re: "Asset Protection" for young teenage driver in the household

Post by oldfort »

gwe67 wrote: Sat Sep 04, 2021 10:02 am
snackdog wrote: Fri Sep 03, 2021 9:50 pm Another popular solution is to not provide teens vehicles and insurance. There is no urgency, so they can wait until they have grown, mature, employed and can afford their own wheels and insurance.
Good suggestion. And a lot of rideshare (Uber/Lyft) can be bought for what would have been spent on vehicles and insurance. Also takes joyriding/racing/DUI, etc. out of the risk equation.
Technically, you're supposed to be 18 to ride or request Uber or Lyft unless accompanied by an adult. Uber drivers are not supposed to accept unaccompanied, underage passengers.
Hogan773
Posts: 650
Joined: Thu May 07, 2015 11:14 am

Re: "Asset Protection" for young teenage driver in the household

Post by Hogan773 »

so any thoughts on my question above re: whether 2-3mm umbrella is "enough" at any assets level?
oldfort
Posts: 2756
Joined: Mon Mar 02, 2020 8:45 pm

Re: "Asset Protection" for young teenage driver in the household

Post by oldfort »

Hogan773 wrote: Sat Sep 11, 2021 7:47 am Are there realistically car accidents where someone can successfully make the case that they deserve 25 million?
Yes, although the cases are extremely rare, the lifetime costs to provide lifetime care to a quadriplegic are astronomical. Economically, the awarded damages would usually be less if someone died than if they were paralyzed and needed lifetime medical and nursing home care. The other cases where you sometimes see extremely high verdicts are DUIs, where a North Dakota jury came back with a billion dollar verdict.

https://www.willistonherald.com/news/st ... 60118.html
User avatar
TexasPE
Posts: 482
Joined: Sat Feb 17, 2018 8:41 pm
Location: Southeast Texas

Re: "Asset Protection" for young teenage driver in the household

Post by TexasPE »

White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm

You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
+1

I want to be able to help that person or persons that I injured due to my error. Money can't fix everything but it can go a long way to mitigating the issue.
At 20: I cared what everyone thought about me | At 40: I didn't give a damn what anyone thought of me | Now that I'm 60: I realize that no one was really thinking about me at all | Winston Churchill (?)
Hogan773
Posts: 650
Joined: Thu May 07, 2015 11:14 am

Re: "Asset Protection" for young teenage driver in the household

Post by Hogan773 »

TexasPE wrote: Sat Sep 11, 2021 2:49 pm
White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm

You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
+1

I want to be able to help that person or persons that I injured due to my error. Money can't fix everything but it can go a long way to mitigating the issue.
So is your point that you are happy to spend more money each year for a large umbrella policy, so that large umbrella policy can be "offered" to the injured party to help you mitigate the issue?
User avatar
TexasPE
Posts: 482
Joined: Sat Feb 17, 2018 8:41 pm
Location: Southeast Texas

Re: "Asset Protection" for young teenage driver in the household

Post by TexasPE »

Hogan773 wrote: Sat Sep 11, 2021 3:01 pm
TexasPE wrote: Sat Sep 11, 2021 2:49 pm
White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm

You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
+1

I want to be able to help that person or persons that I injured due to my error. Money can't fix everything but it can go a long way to mitigating the issue.
So is your point that you are happy to spend more money each year for a large umbrella policy, so that large umbrella policy can be "offered" to the injured party to help you mitigate the issue?
No, my point is that I feel a social/ethical responsibility to do my best to right any wrongs I may commit. YMMV.
At 20: I cared what everyone thought about me | At 40: I didn't give a damn what anyone thought of me | Now that I'm 60: I realize that no one was really thinking about me at all | Winston Churchill (?)
JackoC
Posts: 2629
Joined: Sun Aug 12, 2018 11:14 am

Re: "Asset Protection" for young teenage driver in the household

Post by JackoC »

Hogan773 wrote: Sat Sep 11, 2021 3:01 pm
TexasPE wrote: Sat Sep 11, 2021 2:49 pm
White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
+1
I want to be able to help that person or persons that I injured due to my error. Money can't fix everything but it can go a long way to mitigating the issue.
So is your point that you are happy to spend more money each year for a large umbrella policy, so that large umbrella policy can be "offered" to the injured party to help you mitigate the issue?
Notwithstanding the subsequent response (which is fine, people can do whatever they want for whatever reason they want as long as legal and not impinging on me), I'd just opine that the original statement about the 'whole point of asset protection' is the kind which tends to trigger emotional reactions and claims/accusations of virtue/non-virtue that are basically irrelevant. To whatever degree you consider any hypothetical future claim against you to necessarily involve you 'doing wrong' and/or assume any award by a court is 'rightful' or not, insurance will protect your assets (and lack of insurance not protect them) to exactly the same degree. Also the premium on the insurance will be exactly the same no matter what you think about either of those things .The insurance company won't ask your views of your future hypothetical actions (assuming you wouldn't tell them you *intend* to cause harm) or your opinion of the integrity of the tort system when setting the premium. That's a big hint IMO that the moral angle is an irrelevant tangent. Or at least it is under the assumption of the thread that there's a serious asset value to protect. If a person had basically no assets and was proposing to buy a huge umbrella policy to 'help other folks' someday, maybe. But you might also just donate that amount of money to charity now and eliminate the overhead. I struggle to see how the question moves toward a sensible answer by considering who will be right or wrong in a hypothetical future legal action or whether the 'right' party always wins*.

*again the issue tends to spark irrelevant debate. Many people have witnessed people win settlements from the system, often pretrial from insurance companies, on suspect claims. If you've been a landlord to a certain tenant clientele for long enough you will have seen it. But it also has basically nothing to do with how much liability insurance we have, or how we structure the real estate vehicle to protect other assets, our view of merit/fault in hypothetical future liability claims that is.
afan
Posts: 6254
Joined: Sun Jul 25, 2010 4:01 pm

Re: "Asset Protection" for young teenage driver in the household

Post by afan »

White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm
You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
Hardly.

Many lawsuits are simply shakedown attempts. Even if they fail, the person sued suffers.

On the malpractice side, have you heard about the physician who was successfully sued on the claim that their actions lead to the plaintiff losing their psychic powers?

Much of the point of asset protection is to avoid the costs and stress of a lawsuit that is completely devoid of merit. If you have no insurance, fight the case to the end and win at court, you are still out the expensive lawyer fees. You have had your financial life paralyzed for years and you have had the anxiety of not knowing what will happen.

If you have ample assets that are protected by state or federal law and a large insurance policy on top, then a meritless suit will remain annoying but will not involve you paying a fortune in legal fees or facing the concern that a crazy verdict will wipe you out.

That said, asset protection trusts are complicated and expensive. According to an attorney that the WCI interviewed, they work somewhat if you live in an asset protection state and do not work if you do not. Even if the trust is in such a state.

What is involved in protecting the parents from the consequences of their kid's mistakes will depend on state law. If you are worried, check with a lawyer in your state.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
User avatar
scorcher31
Posts: 372
Joined: Sun Mar 06, 2016 11:13 pm

Re: "Asset Protection" for young teenage driver in the household

Post by scorcher31 »

afan wrote: Sun Sep 12, 2021 3:53 pm
White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm
You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
Hardly.

Many lawsuits are simply shakedown attempts. Even if they fail, the person sued suffers.

On the malpractice side, have you heard about the physician who was successfully sued on the claim that their actions lead to the plaintiff losing their psychic powers?

Much of the point of asset protection is to avoid the costs and stress of a lawsuit that is completely devoid of merit. If you have no insurance, fight the case to the end and win at court, you are still out the expensive lawyer fees. You have had your financial life paralyzed for years and you have had the anxiety of not knowing what will happen.

If you have ample assets that are protected by state or federal law and a large insurance policy on top, then a meritless suit will remain annoying but will not involve you paying a fortune in legal fees or facing the concern that a crazy verdict will wipe you out.

That said, asset protection trusts are complicated and expensive. According to an attorney that the WCI interviewed, they work somewhat if you live in an asset protection state and do not work if you do not. Even if the trust is in such a state.

What is involved in protecting the parents from the consequences of their kid's mistakes will depend on state law. If you are worried, check with a lawyer in your state.
The psychic case was overturned by the judge fyi.

We always talk about big verdicts but it's not uncommon for large malpractice verdicts to be appealed and settled for policy limits or go after the hospital for the rest of the money. Don't know if it is different for motor vehicle accidents.
oldfort
Posts: 2756
Joined: Mon Mar 02, 2020 8:45 pm

Re: "Asset Protection" for young teenage driver in the household

Post by oldfort »

afan wrote: Sun Sep 12, 2021 3:53 pm On the malpractice side, have you heard about the physician who was successfully sued on the claim that their actions lead to the plaintiff losing their psychic powers?
This is an urban legend meant to scare doctors. The verdict was immediately set aside on appeal, so the physician was not successfully sued. You're bringing a case from 1986. If frivolous lawsuits were common, you wouldn't have to talk about a case from 35-years-ago to find an example.
afan
Posts: 6254
Joined: Sun Jul 25, 2010 4:01 pm

Re: "Asset Protection" for young teenage driver in the household

Post by afan »

scorcher31 wrote: Sun Sep 12, 2021 4:22 pm
afan wrote: Sun Sep 12, 2021 3:53 pm
White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm
You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
Hardly.

Many lawsuits are simply shakedown attempts. Even if they fail, the person sued suffers.

On the malpractice side, have you heard about the physician who was successfully sued on the claim that their actions lead to the plaintiff losing their psychic powers?

Much of the point of asset protection is to avoid the costs and stress of a lawsuit that is completely devoid of merit. If you have no insurance, fight the case to the end and win at court, you are still out the expensive lawyer fees. You have had your financial life paralyzed for years and you have had the anxiety of not knowing what will happen.

If you have ample assets that are protected by state or federal law and a large insurance policy on top, then a meritless suit will remain annoying but will not involve you paying a fortune in legal fees or facing the concern that a crazy verdict will wipe you out.

That said, asset protection trusts are complicated and expensive. According to an attorney that the WCI interviewed, they work somewhat if you live in an asset protection state and do not work if you do not. Even if the trust is in such a state.

What is involved in protecting the parents from the consequences of their kid's mistakes will depend on state law. If you are worried, check with a lawyer in your state.
The psychic case was overturned by the judge fyi.

We always talk about big verdicts but it's not uncommon for large malpractice verdicts to be appealed and settled for policy limits or go after the hospital for the rest of the money. Don't know if it is different for motor vehicle accidents.
Exactly. Meritless. In fact, completely absurd. But not only did someone have to defend it. They lost in court.

I do not have much confidence in the legal system. Losing the case hardly means that the defendant did anything wrong.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
oldfort
Posts: 2756
Joined: Mon Mar 02, 2020 8:45 pm

Re: "Asset Protection" for young teenage driver in the household

Post by oldfort »

afan wrote: Sun Sep 12, 2021 6:44 pm But not only did someone have to defend it. They lost in court.

I do not have much confidence in the legal system. Losing the case hardly means that the defendant did anything wrong.
The didn't lose in court if the verdict was immediately thrown out by the judge.
afan
Posts: 6254
Joined: Sun Jul 25, 2010 4:01 pm

Re: "Asset Protection" for young teenage driver in the household

Post by afan »

oldfort wrote: Sun Sep 12, 2021 4:26 pm
afan wrote: Sun Sep 12, 2021 3:53 pm On the malpractice side, have you heard about the physician who was successfully sued on the claim that their actions lead to the plaintiff losing their psychic powers?
This is an urban legend meant to scare doctors. The verdict was immediately set aside on appeal, so the physician was not successfully sued. You're bringing a case from 1986. If frivolous lawsuits were common, you wouldn't have to talk about a case from 35-years-ago to find an example.
In order to be "an urban legend" it could not also be true. This really happened.

There is no such thing as "immediately" set aside on appeal. The appeal took months, and the lawyers had to be paid for the initial defense and the appeal. The outcome of the appeal was not a vindication for the defendants. Rather, it was a grant of a motion for a new trial. That new trial took place YEARS later.

The appeal, amazingly, had no problem with the extensive testimony about the plaintiff's psychic powers that were featured in the first trial.

Thus, neither the trial judge nor the appellate court said that claims of psychic powers were absurd and should never be entertained in a courtroom. They just said that the amount of the award was excessive.

None of that is urban legend.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
afan
Posts: 6254
Joined: Sun Jul 25, 2010 4:01 pm

Re: "Asset Protection" for young teenage driver in the household

Post by afan »

Duplicate
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
afan
Posts: 6254
Joined: Sun Jul 25, 2010 4:01 pm

Re: "Asset Protection" for young teenage driver in the household

Post by afan »

oldfort wrote: Sun Sep 12, 2021 6:56 pm
afan wrote: Sun Sep 12, 2021 6:44 pm But not only did someone have to defend it. They lost in court.

I do not have much confidence in the legal system. Losing the case hardly means that the defendant did anything wrong.


The didn't lose in court if the verdict was immediately thrown out by the judge.
It was not immediately thrown out by the judge.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
Joey Jo Jo Jr
Posts: 65
Joined: Mon Jun 21, 2021 11:38 pm

Re: "Asset Protection" for young teenage driver in the household

Post by Joey Jo Jo Jr »

White Coat Investor wrote: Fri Sep 10, 2021 6:27 pm
You might also consider that the whole point of asset protection is to deny somebody something they rightfully deserve according to a court of law.
[/quote]

Didn’t think I’d ever see a physician sign up to be the insurer of any potential negative outcome from their procedures or advice. Causation is not black and white you know, but I promise you there is at least one expert who is certain you are at fault, and the jury may believe him.

Moreover, a potentially large aspect of many verdicts is punitive damage, which is not meant to compensate anyone, but rather to punish the “wrongdoer.” And unlike a fixed fine like a traffic ticket, that punishment will often depend on how well off you are.

So I ask, why should a successful physician, who has likely spent his or her career helping innumerable people, have to give up more to be “punished” for a supposedly “grossly negligent” action of some sort (again subjective, and we are all human after all) than a judgment proof doofus who, for example, habitually drinks and drives until they eventually kill some family? And no I am not a physician. I’m a lawyer that hates to break it to you about the sanctity of our court system.
JackoC
Posts: 2629
Joined: Sun Aug 12, 2018 11:14 am

Re: "Asset Protection" for young teenage driver in the household

Post by JackoC »

oldfort wrote: Sun Sep 12, 2021 4:26 pm
afan wrote: Sun Sep 12, 2021 3:53 pm On the malpractice side, have you heard about the physician who was successfully sued on the claim that their actions lead to the plaintiff losing their psychic powers?
This is an urban legend meant to scare doctors. The verdict was immediately set aside on appeal, so the physician was not successfully sued. You're bringing a case from 1986. If frivolous lawsuits were common, you wouldn't have to talk about a case from 35-years-ago to find an example.
Doubtful lawsuits are pretty common IME. The most extreme cases might acquire mythic proportions but this is common in case of real problems. Again, outside the medical field (where my brother spent years fighting a suit over the heart attack of a patient who was a cocaine user, and never told my brother...my brother eventually won completely, years, so no problem? :shock: ), if you're a landlord in certain areas/clientele you see people bringing doubtful personal injury claims disturbingly non-rarely. The previous owner of one of our buildings went uninsured and lost a $300k injury judgment to a tenant for a slip and fall. She skipped the country to avoid paying after selling the building to us, none of this disclosed to us. The judgement could not be enforced against us but a different member of the same tenant family coincidentally injured themselves on the stairs a couple of years later. Our insurance company paid to make it go away. That hardly establishes it as 'rightful' IMO, especially if you knew these people. But you definitely want an insurance co in between doing that.

Which leads back off the tangent of 'asset protection is to deny people their rightful claims per a court of law' to reality. Which is, whether or not I proclaim myself virtuous (as in 'I have an ethical obligation to protect people I might hurt YMMV', translation 'I'm virtuous, maybe you're not' :happy ) our insurance co will fight like a cornered animal not to pay out anywhere near the policy limit if it at all possible. When it comes to insurance there is no connection between a lofty or other view of one's own morality and what the insurance co will charge as a premium, or do in case of a claim. And, when it comes to, for example, putting rental real estate assets in LLC(s) in part for asset protection, those looking disdainfully down from their moral high horses should recognize that if they invest in stocks, they are doing fundamentally the same thing. The basic structure is a *limited liability* public stock company (prevents claims against the shareholders exceeding company assets for any reason, including a massive lawsuit), plenty of companies further have internal structures of subsidiaries to limit liability to parts of the company, and their internal counsel and outside law firms will fight every lawsuit to the last appeal if there's a reasonable chance of prevailing...just like your insurance company will. All you're doing as a stock investor is paying somebody else to take a hard nosed approach to lawsuits, even if they are found 'rightful in a court of law' at first. If one's principals are offended by asset protection and vigorous contesting of lawsuits, one must IMO rethink the idea of investing much more fundamentally than just avoiding protecting and vigorously defending yourself in personal hands on situations.
ncbill
Posts: 1146
Joined: Sun Jul 06, 2008 4:03 pm
Location: Western NC

Re: "Asset Protection" for young teenage driver in the household

Post by ncbill »

oldfort wrote: Sat Sep 11, 2021 2:29 pm
Hogan773 wrote: Sat Sep 11, 2021 7:47 am Are there realistically car accidents where someone can successfully make the case that they deserve 25 million?
Yes, although the cases are extremely rare, the lifetime costs to provide lifetime care to a quadriplegic are astronomical. Economically, the awarded damages would usually be less if someone died than if they were paralyzed and needed lifetime medical and nursing home care. The other cases where you sometimes see extremely high verdicts are DUIs, where a North Dakota jury came back with a billion dollar verdict.

https://www.willistonherald.com/news/st ... 60118.html
Decades ago a plaintiff sued a business I worked for after they were left paralyzed from a 'slip & fall' on the business property.

After nearly a year of negotiations plaintiff rejected the settlement offer (low 7 figures, plaintiff wanted 8, presumably for lifetime care) & went to trial, where after several more years, they lost.

Note the settlement could have been structured in a trust where the income was available to the plaintiff but the corpus was protected for their beneficiaries (several young children)...IIIRC, plaintiff did not live too many years after trial.
User avatar
cashboy
Posts: 631
Joined: Tue Sep 11, 2018 5:03 pm
Location: USA

Re: "Asset Protection" for young teenage driver in the household

Post by cashboy »

bds3 wrote: Fri Sep 10, 2021 8:16 pm I didn’t read every reply but several suggested titling the car solely in the kid’s name and getting them a separate insurance policy and bing bang boom problem solved. This was my plan too until my attorney advised me with 100% certainty it wouldn’t work even a little bit for asset protection. Basically if the kid can be considered a dependent (even if you don’t claim him/her as such on your taxes), ie if they live in your house, or are in college and you pay their tuition, then you will still be responsible/liable for their actions.

May vary by state.
if you do not mind me asking, which state was this?

from everything i have read on the subject once a person reaches age 18, has a car titled and registered in their name, and has their own insurance in their name, then they and they alone are responsible regardless of their living arrangements.
Last edited by cashboy on Mon Sep 13, 2021 4:32 pm, edited 1 time in total.
Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CASH - Canned Beans - Rice - Bottled Water)
TPIR
Posts: 69
Joined: Fri Nov 01, 2019 6:12 pm

Re: "Asset Protection" for young teenage driver in the household

Post by TPIR »

Hogan773 wrote: Sat Sep 11, 2021 1:18 pm so any thoughts on my question above re: whether 2-3mm umbrella is "enough" at any assets level?
Bessemer Trust - an ultra high net worth investment adviser with an insurance advisory practice - says go at or a bit above your net worth plus five to ten years worth of income, with a 'good enough' max of $20mn. Their logic is based on the data they've seen (presumably court cases) personal / family judgements end up below $20mn, with a few outliers.

https://www.bessemertrust.com/sites/def ... ityIns.pdf

The founder of PersonalUmbrella.com pointed out in an article a couple $2mn and $5mn claims they've had to handle but that was 10 years ago with about 12 years of business

https://www.personalumbrella.com/ref/do ... hNotes.pdf

This marketing document for RLI shows some examples, none over $1mn - but doesn't mean they didn't handle some larger events

http://www.iiabo.org/Products/SiteAsset ... os2015.pdf

Some data from an umbrella policy for CPAs. 13% of claims settled were in the $1-$5mn range

https://www.cpai.com/Education-Resource ... for-Your-R

No judgement amounts here but this article implies some insurers are finding umbrellas less profitable as claim amounts have risen. One driver is more traumatic brain injury cases (hard to tell whether that's because of more ability to diagnose or more bicyclists / pedestrians injured by distracted drivers)

https://www.genre.com/knowledge/blog/in ... es-en.html

Overall I get the impression there is a bit of tail wag the dog - where the amount of the policy drives a chunk of the outcome. That is if someone had a lower limit for the same incident, the settlement would be lower - and in both situations the umbrella would be the extent of the settlement many times.
Last edited by TPIR on Mon Sep 13, 2021 6:48 pm, edited 7 times in total.
HIMcDunnough
Posts: 49
Joined: Tue Nov 12, 2019 11:55 am

Re: "Asset Protection" for young teenage driver in the household

Post by HIMcDunnough »

talzara wrote: Wed Sep 08, 2021 11:27 am
tarnation wrote: Tue Sep 07, 2021 1:31 pm I don’t think it is open and shut without all that data from the vehicle. And without it the plea deal also gets better. What year was that law you referenced enacted?
The Highway Safety Act of 1970 allows NHTSA to set regulations for vehicle safety.

When I looked up the black box regulation, it turns out that NHTSA withdrew it because new cars already have event data recorders installed. It doesn't make sense to me. New cars also have seat belts installed, but the regulations still require seat belts.

Therefore, I must correct my statement. The black box is not required by law, but this young man's car had one anyway. Even if there hadn't been a navigation system in the car, the black box proved that he was driving 100 mph in a 35 mph zone.
One of the big reasons auto manufacturers install event data recorders is to provide exculpatory evidence (vehicle telemetry, seat belts, timing of airbag deployment, etc.) in the event of a product liability suit against the manufacturer.
TPIR
Posts: 69
Joined: Fri Nov 01, 2019 6:12 pm

Re: "Asset Protection" for young teenage driver in the household

Post by TPIR »

Also this metadata may be useful - it's a listing of jury awards above $5mn in California (not necessarily complete but prob close)

https://www.juryverdictalert.com/index. ... k=dosearch

If you read carefully at the bottom you can see what was offered pre-trial by the plaintiff.

You can also see whether the defendant was an individual or an entity.

This case was one of the largest i could find with an individual as the defendant. She drove while high on pot, her policy had a $15,000 limit which was offered. Plaintiff asked for $2mn total pre-trial to settle. They went to trial asking for $125mn, and ended up with a $5mn verdict.

https://www.juryverdictalert.com/index. ... k=dosearch

Reading through, instances of well insured in the millions getting slapped with a jackpot jury verdict without plaintiff being OK to settle for policy limits pretrial don't seem common - even among the already small realm of jackpot verdicts.

This one here involved a $2mn umbrella with Farmers. Plaintiff was okay with the policy limit as a settlement, but looks like the carrier lowballed. Ended. up going to trial, plaintiff awarded over $7mn, but defendant got Farmers to pay $7mn (even with $2mn umbrella) just before filing appeal.

https://www.juryverdictalert.com/jury-v ... es-collide

I think there's some sort of law (CA?) that the carrier must make a good faith offer against the policy limit before trial, and if they don't they are on the hook for more. But I'm not an attorney.

"On January 4, 2017, plaintiff demanded what was disclosed to her, a Farmer’s policy limit of $100,000. On March 3, 2017, defendant’s counsel disclosed the limits were actually $250,000 with a $2,000,000 umbrella. Plaintiff served defendant with an Offer to Compromise in the amount of $2,250,000 on August 30, 2017.

On December 29, 2017, defendant extended an offer of $300,000. In response, on January 9, 2018, plaintiff offered to settle for $1.9 million. Defendant never responded to that offer and it lapsed. A mediation in front of Hon. W. Scott Snowden (Ret.) occurred on February 22, 2018. The mediation failed. On June 26, 2018, defendant served plaintiff with an Offer to Compromise in the amount of $500,000. Plaintiff responded by serving defendant with an Offer to Compromise in the amount of $1,200,000 on July 3, 2018. No counter offer was ever made by defendant’s carrier.

The matter has since been resolved on the day before defendant had to file its notice of appeal with Farmers Insurance agreeing to pay the sum of $7 million. Plaintiff’s judgment plus pre-judgment interest and costs due to the year-old statutory demand was approximately $7.5 million.

"

This one is a head scratcher though. Defendant had a $2mn policy with Liberty Mutual. Plaintiff was ok with a policy limit offer before trial.

But Liberty Mutual only offered $1.25mn, and it went to trial with a $10mn verdict.

https://www.juryverdictalert.com/jury-v ... or-mathews

It's not in the notes but looks like defendant sued and settled with Liberty Mutual afterward (not clear amount but maybe based on that 'good faith' provision I'm thinking of)

https://dockets.justia.com/docket/calif ... 595/691660
TPIR
Posts: 69
Joined: Fri Nov 01, 2019 6:12 pm

Re: "Asset Protection" for young teenage driver in the household

Post by TPIR »

This is an interesting read on the ins and outs of finding out a defendant's assets in a personal injury claim from a PI attorney's website

https://www.sallymorinlaw.com/personal- ... ot-enough/

In short - looks like this attorney operates without disclosure typically until a settlement offer is made by the plaintiff, and is part of the defendant's acceptance. Not sure if it's typical.


For insurers, revealing the policy limit is a whole game in itself and calculation that they'll win at trial vs lose and face higher payout plus a possible good faith lawsuit from the insured

https://www.andersonkill.com/Publicatio ... -to-Settle

https://www.grsm.com/publications/2012/ ... urer-to-do
Last edited by TPIR on Mon Sep 13, 2021 6:47 pm, edited 2 times in total.
boglerdude
Posts: 923
Joined: Fri Jul 10, 2015 1:28 am

Re: "Asset Protection" for young teenage driver in the household

Post by boglerdude »

^ when there's a serious injury you also get your own lawyer to make sure your insurance offers the limit. $1M + your underlying is enough, unless there's proof of foreseeable negligence
TPIR
Posts: 69
Joined: Fri Nov 01, 2019 6:12 pm

Re: "Asset Protection" for young teenage driver in the household

Post by TPIR »

Good to know also didn't know that when there's a bad faith insurer claim possible the plaintiff's attorney will sometimes ask the defendant to assign the bad faith case to them in exchange for dropping any personal liability

https://www.martindale.com/legal-news/a ... 194166.htm
oldfort
Posts: 2756
Joined: Mon Mar 02, 2020 8:45 pm

Re: "Asset Protection" for young teenage driver in the household

Post by oldfort »

JackoC wrote: Mon Sep 13, 2021 9:15 am Which leads back off the tangent of 'asset protection is to deny people their rightful claims per a court of law' to reality. Which is, whether or not I proclaim myself virtuous (as in 'I have an ethical obligation to protect people I might hurt YMMV', translation 'I'm virtuous, maybe you're not' :happy ) our insurance co will fight like a cornered animal not to pay out anywhere near the policy limit if it at all possible. When it comes to insurance there is no connection between a lofty or other view of one's own morality and what the insurance co will charge as a premium, or do in case of a claim. And, when it comes to, for example, putting rental real estate assets in LLC(s) in part for asset protection, those looking disdainfully down from their moral high horses should recognize that if they invest in stocks, they are doing fundamentally the same thing. The basic structure is a *limited liability* public stock company (prevents claims against the shareholders exceeding company assets for any reason, including a massive lawsuit), plenty of companies further have internal structures of subsidiaries to limit liability to parts of the company, and their internal counsel and outside law firms will fight every lawsuit to the last appeal if there's a reasonable chance of prevailing...just like your insurance company will. All you're doing as a stock investor is paying somebody else to take a hard nosed approach to lawsuits, even if they are found 'rightful in a court of law' at first. If one's principals are offended by asset protection and vigorous contesting of lawsuits, one must IMO rethink the idea of investing much more fundamentally than just avoiding protecting and vigorously defending yourself in personal hands on situations.
IMO, this is an unreasonable comparison. If you think the person who personally drives a car and kills someone, and in many cases is drunk, or high, or texting, has the same moral culpability for a car accident as a shareholder in a mutual fund which invests in BP does for the BP oil spill, on some theory being a 0.0000001% indirect shareholder gives you any meaningful control of the company, I don't know where to begin.
Last edited by oldfort on Mon Sep 13, 2021 8:34 pm, edited 1 time in total.
matt1882
Posts: 95
Joined: Sun Jun 03, 2007 6:24 pm

Re: "Asset Protection" for young teenage driver in the household

Post by matt1882 »

Buy an insurance contract (Llyod's?) where the policy limit is $5 million except that it automatically goes down to $5,000 if the plaintiff files a complaint with a demand exceeding $5 million. Make sure plaintiff's counsel gets a copy of the contract.
mathwhiz wrote: Thu Sep 02, 2021 7:46 pm Our son is approaching the age when he can apply for his learners permit and we are very concerned about protecting our assets if he gets into an at fault accident.

So the basics is we have a lot of money in "protected" assets from creditors and Florida is a very friendly state for asset preservation from lawsuits. Our ROTH's, 401k's, pensions, Homestead property. All protected and untouchable from my understanding.

That still leaves a 7 figure taxable portfolio that is a target. I could jack up the umbrella to millions but that won't stop an attorney from suing for everything if our son does something abominably stupid like kill someone drinking and driving. The premiums would also be very expensive.

So I'm interested in more advanced asset preservation options such as trusts and other structures that make these assets airtight from potential creditors.

Anyone have this experience and have suggestions?
SuperTrooper87
Posts: 155
Joined: Tue Jan 26, 2021 6:42 am

Re: "Asset Protection" for young teenage driver in the household

Post by SuperTrooper87 »

Brianmcg321 wrote: Thu Sep 02, 2021 8:25 pm That's why you give your kid a beater to drive. A faded out 10 yr old civic will do. Then if they are in an accident, and you come to the scene to pick them up, be sure to drive the crummiest car you can. And wear an old worn out t-shirt with holes. Borrow a friends farm truck or their kids beater.
This. Unless they know you’re the rich family in town.

Look into different apps that track your kids driving. I remember being a teenager and doing dumb things. At least you can track it, shut it down or revoke the privilege.
JackoC
Posts: 2629
Joined: Sun Aug 12, 2018 11:14 am

Re: "Asset Protection" for young teenage driver in the household

Post by JackoC »

oldfort wrote: Mon Sep 13, 2021 6:43 pm
JackoC wrote: Mon Sep 13, 2021 9:15 am Which leads back off the tangent of 'asset protection is to deny people their rightful claims per a court of law' to reality. Which is, whether or not I proclaim myself virtuous (as in 'I have an ethical obligation to protect people I might hurt YMMV', translation 'I'm virtuous, maybe you're not' :happy ) our insurance co will fight like a cornered animal not to pay out anywhere near the policy limit if it at all possible. When it comes to insurance there is no connection between a lofty or other view of one's own morality and what the insurance co will charge as a premium, or do in case of a claim. And, when it comes to, for example, putting rental real estate assets in LLC(s) in part for asset protection, those looking disdainfully down from their moral high horses should recognize that if they invest in stocks, they are doing fundamentally the same thing. The basic structure is a *limited liability* public stock company (prevents claims against the shareholders exceeding company assets for any reason, including a massive lawsuit), plenty of companies further have internal structures of subsidiaries to limit liability to parts of the company, and their internal counsel and outside law firms will fight every lawsuit to the last appeal if there's a reasonable chance of prevailing...just like your insurance company will. All you're doing as a stock investor is paying somebody else to take a hard nosed approach to lawsuits, even if they are found 'rightful in a court of law' at first. If one's principals are offended by asset protection and vigorous contesting of lawsuits, one must IMO rethink the idea of investing much more fundamentally than just avoiding protecting and vigorously defending yourself in personal hands on situations.
IMO, this is an unreasonable comparison. If you think the person who personally drives a car and kills someone, and in many cases is drunk, or high, or texting, has the same moral culpability for a car accident as a shareholder in a mutual fund which invests in BP does for the BP oil spill, on some theory being a 0.0000001% indirect shareholder gives you any meaningful control of the company, I don't know where to begin.
I think your confusion here just underlines how unproductive it is to inject 'morality' into the issue of asset protection in the first place. Taking your first point, 'drives a car and kills someone', but then you are making further assumptions such as 'is drunk' etc. The ethical issue there would be that it's wrong to drive drunk. Having driven drunk would not retroactively make it ethically questionable to arrange asset protection before the fact for a car accident that could happen for any reason. It could be a true accident. It could also be an accident where the opposing side in a legal proceeding *claims* you were reckless, but people claim lots of things in court and the court system isn't perfect. If the court system didn't make mistakes and moreover if its proceedings were fast and cheap, that would be a more plausible reason to leave yourself unprotected and give over your assets in cases where you were at fault, since you would never have to do this when not at fault, and fault would be quickly and cheaply determined. In the real world this is far from true, and makes it a major cherry picking problem to say 'in many cases drunk, high, texting', failing to account for the other than 'many' where one is not, let alone the 100% of car accidents involving me where I would not be doing any of those three things. Others have started a theme of *individual* ethics of asset protection; it's not reasonable to then say it doesn't matter what one's individual situation is in making that decision.

So to assume that your assets will only come under attack related to *wrong* individual actions you take, much less assume that's *the* reason to have asset protection is clearly unrealistic. Then the point about .000001% or whatever just underlines my point. To put it more on me v me than us v them basis, it would be nonsensical for me to say I'm on solid ethical ground to avail myself of the limited liability structure in my mutual fund investments (which I do) but on ethically shaky ground when I use it for my more concentrated rental real estate assets (which I also do). IOW in order to 'ethically' pursue a hands on business, I have to leave myself open to losing more than my investment via lawsuits. Clearly ridiculous, IMO.
Post Reply