Put car under LLC for asset protection?

[G]

I Find This Humerus wrote:

G wrote:

I Find This Humerus wrote:

500mil OBGYN lawsuit in my state 

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as in half a billion dollars?

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Sorry I meant to type $50 million

 

https://www.nbcconnecticut.com/news/local/Jury-Awards-58-Million-in-Malpractice-Suit-122605689.html

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$58M ... so that comes out to like $2000/day if the kid lives to 80 ... either that is some really expensive nursing care or the jury is trying to predict loss of future earnings based on a CEO or a franchise ballplayer salary?

I feel bad for the family and the little boy, but it is nonsense like this that makes me wonder why any doctors do OB.  Let the lawyers deliver the babies since they seem to know how to do it so well.

[nephron]

I like the idea of forming an llc for your scalpel for malpractice protection.   Good luck penetrating that, I will send you the scalpel if I lose the case .

[afan]

You would own the LLC. If you were to lose a malpractice suit then your interest in the LLC would be among the things that the plaintiff could go after. If there were no business purpose to having the car in the LLC then a judge might declare it unprotected anyway.

You could increase your malpractice coverage. It is hard to arrange a way to use something as if you own it but legally have it be beyond the reach of your creditors. It is supposed to be hard to do this.

I don't know whether it is true that the courts would never take your house or your car. Tenants by the entirety or homestead, depending on your state, may protect your house. Unless you have some extremely expensive car, this is not worth worrying about. If your malpractice limit is $30,000 short of the judgement, I suspect the plaintiff would rather just wait for you to generate some more money than get your used car.

If you have a $300,000 car, then the plaintiff's attorney is going to be thrilled to get that information to the jury.

[I Find This Humerus]

G wrote:

I Find This Humerus wrote:

500mil OBGYN lawsuit in my state 

Click to expand…

as in half a billion dollars?

Click to expand...

Sorry I meant to type $50 million

 

https://www.nbcconnecticut.com/news/local/Jury-Awards-58-Million-in-Malpractice-Suit-122605689.html

[I Find This Humerus]

Kamban wrote:

I Find This Humerus wrote:

Kamban wrote:

Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.

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Why?

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The car is a depreciating asset. Unless it is a very expensive car it is not going to sell for much. There is the hassle of selling the car. And even if you lose the case the automobile and house are not seized as part of the judgment, since judges think you need a place to stay and a means of transportation to continue to work.

The opposing party wants cold hard cash.

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If I own a Bentley, no one will think I need a Bentley to get to work when I could afford a Jetta with my leftover money.

[G]

I Find This Humerus wrote:

500mil OBGYN lawsuit in my state

Click to expand...

as in half a billion dollars?

[jfoxcpacfp]

The car needs to have a business purpose to be put inside an LLC.

No, do not put your car in an LLC. You work at home, there is no business purpose. Someone more educated than I might call this a little paranoid, but I'm not qualified to do so ?. Buy all the umbrella coverage your insurer allows and don't let anyone drive it who is not covered on your policy.

[Raster]

This is not a silly question at all.  I would think of it in the opposite way however.  A car is a significant SOURCE of liability.  If you get into an accident while driving your car, nothing will help you.  However, if your car is driven by others for any reason, having the car in an LLC may help.  The driver of the car and the owner of the car will be sued.  Don't be the owner of the car.  Even if no one other than you and your spouse drives the car, this is important in situations when you hope to have some protection of your residence due to titling it as tenancy by the entirety.  If you both own the car and that car gets into an accident, you are both liable and any protection afforded by the tenancy by the entirety house titling would be lost.  There may be something to be said for titling each vehicle only in the name of the primary driver of the vehicle, or an LLC, or just buy adequate umbrella coverage and don't worry about it.  Of course, this is highly state dependent, I am not a lawyer, and if you think this matters you should talk to one.

[Kamban]

I Find This Humerus wrote:

Kamban wrote:

Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.

Click to expand…

Why?

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The car is a depreciating asset. Unless it is a very expensive car it is not going to sell for much. There is the hassle of selling the car. And even if you lose the case the automobile and house are not seized as part of the judgment, since judges think you need a place to stay and a means of transportation to continue to work.

The opposing party wants cold hard cash.

[CordMcNally]

We just had a similar thread about the chances of a lawsuit actually going above your malpractice limits. It’s about as close to zero as you can get. Your time is better spent worrying about other things.

[I Find This Humerus]

CordMcNally wrote:

I Find This Humerus wrote:

Yes this. I don’t want to potentially lose my car in a malpractice suit from my main W2 job.

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Do you have any reports of this happening?

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There is always a fear of losing assets in a lawsuit. 50mil OBGYN lawsuit in my state. Do you have that much cash liquid? And yes I know it was probably settled for less but still.

[I Find This Humerus]

Kamban wrote:

Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.

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Why?

[CordMcNally]

I Find This Humerus wrote:

Yes this. I don’t want to potentially lose my car in a malpractice suit from my main W2 job.

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Do you have any reports of this happening?

[I Find This Humerus]

CordMcNally wrote:

I took it that he’s trying to protect his car from being in a judgement, not that he’s trying to limit where lawsuits stemming from the car can go.

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Yes this. I don't want to potentially lose my car in a malpractice suit from my main W2 job.

[Kamban]

Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.