When being sued, what assets are protected?

[buckrogers]

What is the name of your state? PA
Just doing some research. If I am ever sued, what assets are protected from a judgement? I only have a primary home, one car, a 401K plan and less than $10k in cash in the credit union. Just wondering if I need to re-evaluate my liability coverage. Thank you.

 

[quincy]

Here is a link to Pennsylvania's Chapter 81, Judgments and Other Liens. See Subchapter B for exemptions.

https://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=42&div=0&chpt=81
You should speak to your insurance agent about your current coverage and what you might want to have to protect you if you are sued.

 

[Zigner]

What is the name of your state? PA
Just doing some research. If I am ever sued, what assets are protected from a judgement? I only have a primary home, one car, a 401K plan and less than $10k in cash in the credit union. Just wondering if I need to re-evaluate my liability coverage. Thank you.

At this point, according to your other post, you also own approximately 11% of a cottage. If you are sued and you transfer that ownership percentage to a sibling after you are sued, you may find yourself in trouble.

 

[quincy]

At this point, according to your other post, you also own approximately 11% of a cottage. If you are sued and you transfer that ownership percentage to a sibling after you are sued, you may find yourself in trouble.

The person or people with the 89% interest in the cottage will not be pleased to see their asset attached in any judgment against Buck.

buckrogers, the best protection you have is to avoid lawsuits.

 

[buckrogers]

Correct. I do own a small % of a cottage. The cottage is worth about $20k in total. As I never use it, want to give my share to my sister that uses it all the time. My cousin is worried about liability for the cottage and there is also another piece of separately deeded vacant land (less than 1/10 of an acre) next to it that he worries about for liability. I own 1/3 of the 11% of that.

The person or people with the 89% interest in the cottage will not be pleased to see their asset attached in any judgment against Buck.

buckrogers, the best protection you have is to avoid lawsuits.

Not really an asset I want, hence the want to give to sister.

 

[quincy]

Correct. I do own a small % of a cottage. The cottage is worth about $20k in total. As I never use it, want to give my share to my sister that uses it all the time. My cousin is worried about liability for the cottage and there is also another piece of separately deeded vacant land (less than 1/10 of an acre) next to it that he worries about for liability. I own 1/3 of the 11% of that.

Not really an asset I want, hence the want to give to sister.

As long as you are not currently being sued and don't anticipate a suit arising from anything you've done or said, and as long as you are not contemplating or filing bankruptcy (and maybe there are a few other "as long as"s that I can't think of right now ), you should be able to transfer your interest in the cottage and transfer other assets to others.

What is your real concern here? Why the worry about being sued?

 

[buckrogers]

I am not worried, just being prudent. Our family cottage is on a lake next to a very expensive summer camp. My cousin is worried that a camper would get hurt on our property and sue all of us. Wants everyone involved in the properties to get a ton of insurance, just in case. As I don't use the property, it's easiest for me to divest myself of any interest. As my only other assets are my primary residence, a 10 year old car, a 401K plan and a small amount of cash (less than $10k). My house and auto are worth less than $250k combined. I don't see myself as a target of a big lawsuit. I do carry high limits on auto insurance liability and have a $300k umbrella policy. I am always looking at my risk exposure........risk vs reward.... So my main questions are: is my house exposed to a judgement and does my umbrella policy cover the risk at the family cottage?

 

[quincy]

I am not worried, just being prudent. Our family cottage is on a lake next to a very expensive summer camp. My cousin is worried that a camper would get hurt on our property and sue all of us. Wants everyone involved in the properties to get a ton of insurance, just in case. As I don't use the property, it's easiest for me to divest myself of any interest. As my only other assets are my primary residence, a 10 year old car, a 401K plan and a small amount of cash (less than $10k). My house and auto are worth less than $250k combined. I don't see myself as a target of a big lawsuit. I do carry high limits on auto insurance liability and have a $300k umbrella policy. I am always looking at my risk exposure........risk vs reward.... So my main questions are: is my house exposed to a judgement and does my umbrella policy cover the risk at the family cottage?

Oh, okay. Well ... the link I provided earlier gives the exemptions and your insurance agent can go over your insurance coverage with you and provide you with information on the coverage you need to protect yourself in the event you are sued.

It is smart for you to consider the "what-ifs."

Good luck.

 

[not2cleverRed]

I would think it would be more likely that the summer camp would be sued, for not keeping track of the children in their care.

The exception would be if the property is an "attractive nuisance". This can be minimized by following common safety and security standards. For example, if kayaks and canoes are in a locked shed when no one is using the cabin, the liability is less than if stored outside in plain sight.

 

[quincy]

I would think it would be more likely that the summer camp would be sued, for not keeping track of the children in their care.

The exception would be if the property is an "attractive nuisance". This can be minimized by following common safety and security standards. For example, if kayaks and canoes are in a locked shed when no one is using the cabin, the liability is less than if stored outside in plain sight.

If someone is injured on another's property, though, the property owner is almost always included in any lawsuit that might arise. The property owner might not be held liable - but it doesn't prevent a suit or having to defend against it.

Additional insurance coverage is smart.

 

[not2cleverRed]

If someone is injured on another's property, though, the property owner is almost always included in any lawsuit that might arise. The property owner might not be held liable - but it doesn't prevent a suit or having to defend against it.

Additional insurance coverage is smart.

As is taking steps to minimize obvious sources of liability, especially those which will result in higher premiums or cancellation. (Trampolines come to mind.)

Additional insurance coverage is more affordable if you are not high risk.

 

[quincy]

As is taking steps to minimize obvious sources of liability, especially those which will result in higher premiums or cancellation. (Trampolines come to mind.)

Additional insurance coverage is more affordable if you are not high risk.

Right. I think that is why buckrogers is considering selling his interest in the cottage.

 

[Zigner]

Right. I think that is why buckrogers is considering selling his interest in the cottage.

Gifting - but yeah

 

[quincy]

Gifting - but yeah

Gifting is nice.

 

[LdiJ]

I am not worried, just being prudent. Our family cottage is on a lake next to a very expensive summer camp. My cousin is worried that a camper would get hurt on our property and sue all of us. Wants everyone involved in the properties to get a ton of insurance, just in case. As I don't use the property, it's easiest for me to divest myself of any interest. As my only other assets are my primary residence, a 10 year old car, a 401K plan and a small amount of cash (less than $10k). My house and auto are worth less than $250k combined. I don't see myself as a target of a big lawsuit. I do carry high limits on auto insurance liability and have a $300k umbrella policy. I am always looking at my risk exposure........risk vs reward.... So my main questions are: is my house exposed to a judgement and does my umbrella policy cover the risk at the family cottage?

Based on my experience, it would not cost much at all to bump up that 300k umbrella to 1 million.