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Grandson Got Into An Accident – I Am The Registered Owner. How Do I Protect My Money?

Q. I am retired, 68 years old and live in Palm Springs, California. I live mostly off my social security and savings. About four years ago, I purchased a car for my grandson son because he did not have the credit to buy one on his own. The car is completely paid off.

I remained the registered owner of the vehicle. My grandson promised me that he would be responsible for paying the insurance on the car. He let the car insurance expire because he couldn’t make the payments and never told his parents or me. Sure enough he got into an accident about six-months ago and I just received a letter from a lawyer threatening to sue me as the registered owner. They are demanding that I pay the injured driver $15,000. I cannot afford to pay this amount since I live on a limited fixed-income.

The lawyer for the claimant told me that they were going to do an asset search on me and sue me. I have about $86,000 in savings, which I need to preserve and protect. If they locate my bank account, can they freeze my account and take my savings? Do I need to take the money out of my bank account and put it someplace else? What can I do to protect money?

A. In California, as the “registered owner” of the vehicle your are statutorily responsible for up to $15,000 if your grandson was the cause of the accident. I am assuming that he has no separate insurance on the car and no major assets of his own.

Just because the lawyer is threatening you with an asset search does not mean the claimant has the automatic legal right to attach your bank accounts or other forms of property. The claimant must first file a lawsuit, litigate the case, win that suit by proving liability and damages and obtain a judgment against you. This takes a great deal of time and money, and usually this only happens against an uninsured driver where the amount of damages is extensive and the defendant has deep pockets. You don’t seem to be in that category from what you told me.

Therefore, it is highly unlikely that the claimant’s lawyer would take the time and money to pursue you personally just for $15,000. If you own a home however, you might be at risk if it’s paid off, although there are certain homestead exemptions that might be available to protect you in this regard.

It simply makes little sense for a claimant to pursue someone who has no assets and no insurance. Lawsuits take at least one year to come up for trial, which is quite an extensive and expensive process. Also, it is quite possible that the person that your grandson had the accident with had insurance – if so, it means the claimant likely had uninsured motorist coverage which will provide some relief for the injured party and might take you off the hook. I would wait to see if the claimant has coverage before getting too distressed that they may be coming after your bank accounts.