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Put car under LLC for asset protection?

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  • I Find This Humerus I Find This Humerus 
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    Earnest refinancing bonus

    I am mainly a W2 employee but do some contractor work for a local medical insurance company which is 1099.

     

    Should I create an LLC and get paid from my side gig to my LLC? And is there any benefit to putting my car under my LLC even though I work from home? Not trying to claim a business expense on the car, just asset protection from my main job in case of a lawsuit. (I feel as though a lawsuit from my main job is more likely than from my side gig.)

     

    Is this a good idea?

    #221016 Reply
    CordMcNally CordMcNally 
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    I’m sure others can give you a better answer to your question but, to me, you’re in the “overthinking it” category.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #221018 Reply
    Hank Hank 
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    Who is going to drive the car?  If you drive the car, you’re personally liable for your actions, not limited to the value of your car.  If you entrust the car to someone else to drive, you are responsible for their acts.

    Could you form an LLC to own your surgical instruments, then limit your med-mal liability to the value of a scalpel?

    #221020 Reply
    CordMcNally CordMcNally 
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    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.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #221022 Reply
    Avatar Kamban 
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    Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.

    #221025 Reply
    I Find This Humerus I Find This Humerus 
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    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.

    Click to expand…

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

    #221031 Reply
    CordMcNally CordMcNally 
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    Yes this. I don’t want to potentially lose my car in a malpractice suit from my main W2 job.

    Click to expand…

    Do you have any reports of this happening?

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #221032 Reply
    I Find This Humerus I Find This Humerus 
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    Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.

    Click to expand…

    Why?

    #221035 Reply
    I Find This Humerus I Find This Humerus 
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    Yes this. I don’t want to potentially lose my car in a malpractice suit from my main W2 job.

    Click to expand…

    Do you have any reports of this happening?

    Click to expand…

    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.

    #221037 Reply
    CordMcNally CordMcNally 
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    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.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #221038 Reply
    Avatar Kamban 
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    Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.

    Click to expand…

    Why?

    Click to expand…

    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.

    #221039 Reply
    Avatar Raster 
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    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.

    #221042 Reply
    jfoxcpacfp jfoxcpacfp 
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    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.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #221052 Reply
    Avatar G 
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    500mil OBGYN lawsuit in my state

    Click to expand…

    as in half a billion dollars?

    #221063 Reply
    Liked by octopus85
    I Find This Humerus I Find This Humerus 
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    Unless it is a Bugatti Veyron costing > $1M it is not worth it to put it in the LLC.

    Click to expand…

    Why?

    Click to expand…

    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.

    Click to expand…

    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.

    #221391 Reply

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