Automobiles, boats and other vehicles are typically not one’s most valuable assets, yet vehicles are assets that judgment creditors can quickly and easily seize. One alternative is to title automobiles and other vehicles to the less wealthy spouse, but it’s far preferable to title them to a separate entity such as an LLC. This will better protect you against the uninsured accident where someone else (such as a child) causes the accident. For protection, it’s usually enough to refinance a vehicle if a judgment is imminent. This leaves no equity for the creditor. Vehicles should never be co-owned. For instance, if a husband and wife co-own a car, both spouses will be sued if the vehicle is involved in an accident. Your objective when you title your vehicles is to personally insulate yourself from liabilities caused by the vehicle. Simultaneously, you want to protect your equity in the vehicle from your personal creditors. To accomplish this, one should title their vehicles – including boats and airplanes – to an LLC. We also recommend that our clients purchase a one million dollar liability policy and a two million dollar umbrella policy. Liens against your vehicles can complete its protection, as can leasing your vehicle.
