Legal Question in Personal Injury in California

Asset protection

My wife was in an automobile accident where another car collided with hers. Our insurance company found her at least 51 percent responsible. Our agent said that our $100,000 coverage per person will be exhausted by the extent of the injuries of the other driver. When the other driver sues us for the amount over our insurance, may he sue just my wife, or both registered owners? (my wife and I). Also, does community property take precedent? If we transfer our assets from my wifes name to just mine, are we protected? Or, must we transfer our assets completely out of both of our names? Also, is there any minimum amount of time that must elapse between the transfer and the filing of the lawsuit or claim? Thank you.

Asked on 4/28/06, 10:39 pm

3 Answers from Attorneys


Re: Asset protection

1. If you both are the registered owners, both can (and should) be sued.

2. Any post-accident transfers of any real property MAY be considered fraudulent conveyances and could be set aside in the future if found to be done to avoid paying the other person's claim.

Good luck and thanks for your questions.

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Answered on 5/04/06, 1:11 am
Terry A. Nelson Nelson & Lawless

Re: Asset protection

The transfers you are proposing would be a fraud upon the other parties and the court, so you should get some actual legal advice before doing anything so foolish.

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Answered on 5/04/06, 2:26 pm
Joseph Richardson Borton Petrini LLP

Re: Asset protection

First of all, if your insurance would come close to dealing with the damages of the other party, your insurance company will be obligated to do all it can to protect you. That is, unless the damages are a whole lot more than 100,000, and therefore it would be unreasonable for the other side to just settle for the 100,000, your insurance company will not settle the case unless you are completely released from liability in exchange. So, they are supposed to be the first line of defense. If your insurance does not do everything it can to protect you, it could be sued for bad faith.

Finally, if your assets are significantly encumbered, it may not be worth it for the plaintiff to get a judgment and sit on it.

As a general principle, I would not encourage any transfers of property from her name to yours at this point. First, if you are married and own things together, theoretically, they could attach your house, etc. A transfer for the sake of protection from suit, now that this situation is on the horizon, would potentially look like a fraudulent conveyance, which could spell more trouble. Advice for the future: have more insurance if you have significant assets that are minimally encumbered, and seriously consider putting your assets in trust.

But, again, your insurance company should be doing all it can to protect you going forward.

Hope this helps.

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Answered on 5/03/06, 7:21 pm

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