Should I Put my car into son's name

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Latest post 11-02-2010 7:57 AM by Drew. 15 replies.
  • 10-30-2010 10:58 AM

    Should I Put my car into son's name

    My son just turned 21 last week. I bought a new car last year and kept my old one so he could use it. He attends a college about 50 miles away and has it with him there. But due to the close proximity of school, he does a lot of commuting home. My question is was it a mistake to leave it in my name. I'm worried that if he gets into trouble with it, I will be liable. Things have been finacialy tough over the last few years and we can't afford a law suit. The only thing we have of value is the house. Losing that will destroy us. (Should we put a Homestead on it) And the fact that he just turned 21 worries us that there may be more dangerous activity coming soon. (He's not a bad kid, but mistakes can be made). Would it be smart to put the car into his name or is there another solution?

    If anyone can elighten me on this situation, I'd appreciate it.

     

     

  • 10-30-2010 11:09 AM In reply to

    Re: Should I Put my car into son's name

    OK, I'm not a lawyer.

    But if he's 18 or older, I personally, would absolutely put the car in his name.

    It's his car anyway, right? 

    I'd also let him get his own insurance in his own name as well, if it were me.  He wouldn't be on MY plan if I were you.  It's time for him to move on to his own.

    Whatever trouble he wants to decide to either get into, or not get into, let it be his own problem.

    That's my advice.

     

  • 10-30-2010 11:14 AM In reply to

    Re: Should I Put my car into son's name

    by the way, as I'm sure you know, that puts him responsible for car tax, insurance, inspection, etc.  If you can help him, that's great.  But you don't have to.

    I myself, always like to be in a position, that legally, I owe nothing, but if I want to help out financially, I can always do that.

    At the age of 18, I most certainly had the car in my name, the insurance in my name, the inspections were paid by me, the gas, paid by me, etc etc.  I still remember trying to get my dad to co-sign on a car loan.  No way he said.  I went to as many banks, til I found one that would loan me the money I wanted, without a co-sign, the 18 year old.

    I'm beginning to think we (myself included) do too much for our children now.  I guess I'm getting old:)

     

  • 10-30-2010 11:25 AM In reply to

    Re: Should I Put my car into son's name

    I would put the automobile in my son's name and let him obtain his own insurance for same.

    As far as "Homestead" exemption, I suggest you consult an attorney.

    For Massachusetts, the homestead exemption is limited to a monetary value of $50,000 to $200,000 depending upon circumstances.  The exemption does not apply against taxes, debts existing prior to acquisition of the homestead, debts for the purchase of the homestead, spousal or child support, or ground rent.  If a husband and wife own a homestead, the law usually requires that both of them sign a conveyance or mortgage regarding the real estate for it to be applicable or enforceable against both spouses.  A homestead is created by a declaration of it in a deed or afterwards by written declaration which is duly recorded with the registry of deeds.  Massachusetts C. 188, §1, 1A, 7;  C. 236, §18.

  • 10-30-2010 11:38 AM In reply to

    Re: Should I Put my car into son's name

    BillD01603:
    I bought a new car last year and kept my old one so he could use it. He attends a college about 50 miles away and has it with him there. But due to the close proximity of school, he does a lot of commuting home. My question is was it a mistake to leave it in my name.

    No.

    I have to disagree with Supe on this and I'll give you the point of view of a 35 year veteran of the insurance business.

    Keep the car in your name. Having two cars on the same policy gives you a multi-car discount. Separating the ownership results in a big increase in rates on his car and if you are supporting him through college there's no sense in wildly increasing your rates if you don't have to.

    Insurance companies have no problem with a parent providing a car for a college student away from home. In fact there is even a classification for it. Just make sure you notify the insurance company of the change and get the policy properly adjusted. Insurance companies generally allow that until the student graduates.

    BillD01603:
    I'm worried that if he gets into trouble with it, I will be liable

    There's a difference between liability and coverage. You wouldn't be liable for accidents caused by your son, but the policy would certainly cover them and protect you if you were also named in a lawsuit.

    BillD01603:
    Things have been finacialy tough over the last few years and we can't afford a law suit. The only thing we have of value is the house. Losing that will destroy us.

    Then increase your liability limits to greater than the value of the house. Limits of $300,000 would probably be enough since the majority of liability claims are settled out of court for less than that.

    BillD01603:
    (Should we put a Homestead on it

    That's probably a good idea regardless of any other considerations.

    Here's the statute:

    http://www.malegislature.gov/Laws/GeneralLaws/PartII/TitleI/Chapter188

    Here's a guide:

    http://www.probatecourtiannella.com/HomesteadAct.htm

    Here's the form:

    http://www.probatecourtiannella.com/SelfHelpBrochures/HomesteadForm.pdf

    BillD01603:
    And the fact that he just turned 21 worries us that there may be more dangerous activity coming soon. (He's not a bad kid, but mistakes can be made). Would it be smart to put the car into his name or is there another solution?

    The solution is leave it as is and trust your kid to be responsible. If something happens, you and he are covered.

    Personal note. I provided a car for my daughter throughout college and insured it on my policy. She even had an at-fault accident at one point. No big deal. Insurance paid and we still kept the policy as is. When she graduated and got a job, she bought herself a new car and paid for her own insurance.

    That's how it's supposed to work.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 10-30-2010 12:37 PM In reply to

    Re: Should I Put my car into son's name

    Thanks everyone. I have a lot to think about.

    Bill D.

  • 10-30-2010 1:56 PM In reply to

    Re: Should I Put my car into son's name

    Jack is definitely the insurance expert around here, so I would certainly defer to him regarding advice on this.

     

  • 10-30-2010 2:12 PM In reply to

    Re: Should I Put my car into son's name

    Google "negligent entrustment."  You could have potential tort liability based on that, but it is HIGHLY fact specific and tort law is different in each state.

    The normal remedy to try to avoid liability is through insurance, because anybody can sue anybody for anything.  Talk to your insurer about umbrella insurance coverage.

  • 10-30-2010 3:03 PM In reply to

    Re: Should I Put my car into son's name

    Ford:

    Google "negligent entrustment."  You could have potential tort liability based on that, but it is HIGHLY fact specific and tort law is different in each state.

    This is from a Massachusetts appellate decision:

    • Common-law negligent entrustment.   To succeed on a claim for common-law negligent entrustment, the plaintiff must show that the defendant had actual knowledge, as opposed to just reason to know, of the driver's incompetence.  Mitchell v. Hastings & Koch Enterprises, Inc., 38 Mass.App.Ct. 271, 277, 647 N.E.2d 78 (1995).  

    http://caselaw.findlaw.com/ma-court-of-appeals/1216947.html

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 10-30-2010 3:28 PM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
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    Re: Should I Put my car into son's name

    I changed the ownership of my then 21 year old's car from myself to him. I did not do it for insurance purposes. His car is still on our policy, but he will have to make other arrangements when he graduates in January.

    Let's just say that young males seem to have a rather cavalier attitude about paying (or perhaps more correctly, not paying) parking tickets. Most college towns are crowded. Such tickets are inevitable.  Because most such tickets are issued when the driver is not present, they will inevitably find their way to you as the registered owner of the car. However, by the time they find their way to you, the fines will have doubled, yada, yada. This situation can complicate your life when it comes time to reregister the vehicle or even renew your own driver's license.

    I have decided that it was better to let my son deal with those consequences.

  • 10-30-2010 3:50 PM In reply to

    Re: Should I Put my car into son's name

    Kivi:
    I changed the ownership of my then 21 year old's car from myself to him.  His car is still on our policy,

    Does your insurance company know that the ownership changed.

    If you haven't told them, you may be in for an expensive and unpleasant surprise if he causes an accident and you make the claim under your policy.

    Look for the Concealment, Misrepresentation, and Fraud provision of your policy.

    The ownership of the car is a MATERIAL underwriting element.

    Should he have a claim the insurance company is within it's rights to deny coverage and void your policy.

    He needs to make other arrangements NOW. Or you can just sweat it out and hope nothing happens between now and January when he gets his own insurance.

    Unfortunately, bad things tend to happen at the most inconvenient moments.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 10-30-2010 4:03 PM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
    • Posts 6,020

    Re: Should I Put my car into son's name

    The insurance company was aware of the ownership change as I asked them about it before making it.

    In fact, he just had a minor fender bender and they have paid for the damage to the other party's vehicle.

  • 10-30-2010 6:14 PM In reply to

    Re: Should I Put my car into son's name

    Kivi:

    The insurance company was aware of the ownership change as I asked them about it before making it.

    In fact, he just had a minor fender bender and they have paid for the damage to the other party's vehicle.

    Did you get anything in writing? An endorsement to the policy?

    Here's the problem.

    You asked about it. Probably asked your agent. Your agent is not the underwriting department and not the claims department. A small fender bender might have resulted in a cursory investigation where the ownership of the vehicle did not come up.

    In the event of a major accident with significant injuries the claim investigators will pull out all the stops and the agent is likely to have a convenient lapse of memory.

    35 years in the insurance business and I've seen it happen countless times and you've been on these boards long enough to see the posts from people who relied on what they were "told" only to see things go up in smoke later.

    I suggest you call your agent and make sure your policy gets endorsed so that the NAMED INSURED is changed to include your son's name along with yours. The NAMED INSURED is the one at the top of the front page of the policy. That's how you nail it down in writing where the company (not just the agent) has knowledge of it.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 10-30-2010 6:27 PM In reply to

    • Kivi
      Consumer
    • Top 25 Contributor
    • Joined on 01-01-2005
    • CA
    • Posts 6,020

    Re: Should I Put my car into son's name

    The policy shows him as the named insured of the vehicle in question. (We paid all cash for it so there is no endorsement for a lien holder.)

    They are OK doing this as long as we are able to claim him as a dependent on our taxes. Since he was a full time student for more than five months of 2010, we will be able to claim him as a dependent on our 2010 taxes.  He officially graduates in January of 2011, alhtough the semster ends in December. He is only taking six units this semester, although he only needs three to graduate. He is taking six units so that he is considered a half time student for this semester. Otherwise, the grace period on his student loans would start. Unfortunately, those particular three units that he had to take this semester were not available during the spring semester of 2010.

    Because he will be 24 in February of 2011, we won't be able to continue claiming him as a depedent after this year. He will have to get his own policy at that point, even if he decides to go to grad school.

    Also this particular company does not actually use agents.

  • 10-30-2010 8:24 PM In reply to

    Re: Should I Put my car into son's name

    Kivi:
    The policy shows him as the named insured of the vehicle in question.

    Good. That takes care of it.

    If I come off as a bit pedantic now and then it's because i've seen the damage that can be done when people don't cross the t's and dot the i's.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
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