If I might be sued regarding a car accident for which I was at fault, is there anything I can do now, but before actually being sued, to protect my assets?
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If I might be sued regarding a car accident for which I was at fault, is there anything I can do now, but before actually being sued, to protect my assets?
My insurance has a $100,000 personal injury limit but they are saying the medical damages could be over that in which case I might be sued. I’m retired and am living off social security and investment income.
Asked on June 30, 2015 under Accident Law, Oregon
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
It would be very difficult to protect your assets now:
1) If you transfer them to an LLC or to family for less than market value, creditors can very likely have that transfer set aside, since it was done for less than market value after you were aware of the possibility of a suit, as a transfer made to defraud creditors. (And transfers for market value wouldn't help you: you'd get the market value of the assets, and that money could then be targetted by creditors, so you would not have protected assets, but merely changed their form.)
2) Similarly, putting them into a trust could possibly be set aside at this juncture--and the only trusts that would offer any real protection would be ones that deprive you of control over the assets (e.g. irrevocable trusts where you are not the trustee).
Unfortunately, the time to protect your assets is before you need to do so, since once you need the protection, the transfers may be viewed as attempts to defraud creditors.
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