Question for you attorneys, car insurance agents, and for those who might have tread here previously: my mom lives in NC, and my sister lives in TX. Mom is now getting quite elderly, has had a few collisions but is currently insured. My sister and her husband have graciously decided to pay off her current vehicle, but she is going to pay her own insurance on the car.

My mom has a history of making spur of the moment purchases, including a newer shinier car. My wife and I paid off her last car for her, to allow her to be fully retired and financially stable, and within a year she'd traded it for the current vehicle that she has (and cannot really afford to keep up). Sis wants to keep her from being able to trade her current car after they've paid it off for her, but doesn't want the hassle of trying to insure mom as primary on a car that is owned by sis. Confused yet?

So are there ways to prevent mom from being able to trade the car once paid off without putting the title in someone else's name? Or if it will be in sis's name, simplest way to get insurance on a vehicle not in mom's name and out of state? With her driving record, don't want mom's record to raise rates on sis's other cars/property.

Perhaps they could come to an agreement that the payoff would be considered a loan and your sister could put her lien on the title.

quote:

Originally posted by Oz_Shadow:
Perhaps they could come to an agreement that the payoff would be considered a loan and your sister could put her lien on the title.

I thought of that, but even with a lien, could she not find some car salesman that was willing to trade it in? What I mean is, people trade in vehicles that aren't paid off every day, so what would stop her?

If the title to the vehicle is in mom's name, it's mom's car - simple as that.

If the title to the car is in sister's name (in TX) and the garaging address is in NC, sister will need to purchase a NC policy for it. Different carriers will have different underwriting policies concerning out-of-state title holders vs. permanent garaging address / primary drivers.

-Rob

Put title in both names. Both signatures required to sell, either owner can be primary driver.

The concern with being on the title is the potential liability associated with accidents. Depending on the state, this can exceed the limits of the insurance. Some states have a variation of the family purpose doctrine making the owners on the title liable for damages caused by other family members driving the vehicle. The requirements can vary, and you would need to discuss with a NC attorney.

Our main concerns are gaining mom's financial stability, properly insuring against loss of the vehicle, not causing increase in my sister's insurance, and preventing mom from deciding to trade the car on a whim.

Liability is, of course, also an issue. She has friends in NC that we originally considered shifting the title to, but then if my mother is listed as a driver and has a bad driving history, the friend's insurance rates may go up, and that would not be fair to the friend.

quote:

Originally posted by BurtonRW:
If the title to the vehicle is in mom's name, it's mom's car - simple as that.

If the title to the car is in sister's name (in TX) and the garaging address is in NC, sister will need to purchase a NC policy for it. Different carriers will have different underwriting policies concerning out-of-state title holders vs. permanent garaging address / primary drivers.

-Rob

Rob, that's our issue and what we would prefer to avoid. If the title is in sister's name, insurance must run through her. If in mom's, we are all good, BUT she can then decide to sell that sucker.

quote:

Originally posted by a1abdj:
Put title in both names. Both signatures required to sell, either owner can be primary driver.

On this front, if the title is in both names, can my mom still be the only name on the insurance? Liability issues for my sister? Oz brings up very germane questions.

quote:

Originally posted by slabsides45:

quote:

Originally posted by Oz_Shadow:
Perhaps they could come to an agreement that the payoff would be considered a loan and your sister could put her lien on the title.

I thought of that, but even with a lien, could she not find some car salesman that was willing to trade it in? What I mean is, people trade in vehicles that aren't paid off every day, so what would stop her?

Because they make sure the lien gets paid and the lienholder delivers the title, with a lien release to the buyer.

You could add one of the children to the title as an owner, but that may trigger a tax liability to the state. I don't know what it might do to the new owner's insurance rates. Call your insurer to find out how the insurer will handle multiple owners in different states.

Mom is grown woman, and able to make her own decisions. You don't have to like them, and they may not be wise, but . . .

Physically hold the title with a lien on it and be sure your sister is shown on the mothers policy as an also insured (shouldn't add to the cost, that's what lien holder is if it's a bank too).

Let the mother know exactly why she is doing this and she needs to agree that it can't be traded. Explain to her that if she goes to a dealer and trades that you won't release the title and the problems will be hers. Write it out on a piece of paper and have her sign even though it may not be legally binding, she can't say she didn't know.

If she still tries to trade it you have a bigger problem. How is she handling credit cards and other credit and debts?

Why not just up the lien to $100,000 so she cant refi or trade it. Check with a local lawyer who can clear the lien off post death without a taxable event.

quote:

Originally posted by Timdogg6:
Why not just up the lien to $100,000 so she cant refi or trade it. Check with a local lawyer who can clear the lien off post death without a taxable event.

You can't just "up the lien." A lien reflects that the property is security, and only extends to the amount of the debt actually owed.

quote:

Originally posted by jhe888:

quote:

Originally posted by slabsides45:

quote:

Originally posted by Oz_Shadow:
Perhaps they could come to an agreement that the payoff would be considered a loan and your sister could put her lien on the title.

I thought of that, but even with a lien, could she not find some car salesman that was willing to trade it in? What I mean is, people trade in vehicles that aren't paid off every day, so what would stop her?

Because they make sure the lien gets paid and the lienholder delivers the title, with a lien release to the buyer.

You could add one of the children to the title as an owner, but that may trigger a tax liability to the state. I don't know what it might do to the new owner's insurance rates. Call your insurer to find out how the insurer will handle multiple owners in different states.

Mom is grown woman, and able to make her own decisions. You don't have to like them, and they may not be wise, but . . .

Thanks for the input! Yes, I know that so long as the lienholder is satisfied they have no futher stake in the issue, which is why I said I didn't think that was a solution (at least as a stand alone fix).

As is often the case, easier to say than to do. She has some compulsive issues that are well documented, and that's part of the reason that (being as this is the second time we have gone down this same path) we are being so careful.

quote:

Originally posted by 220-9er:
Physically hold the title with a lien on it and be sure your sister is shown on the mothers policy as an also insured (shouldn't add to the cost, that's what lien holder is if it's a bank too).

Let the mother know exactly why she is doing this and she needs to agree that it can't be traded. Explain to her that if she goes to a dealer and trades that you won't release the title and the problems will be hers. Write it out on a piece of paper and have her sign even though it may not be legally binding, she can't say she didn't know.

If she still tries to trade it you have a bigger problem. How is she handling credit cards and other credit and debts?

Poor money management all the way around. We have bailed her out, made payments, paid off vehicles, etc. for years, each time resetting a budget and getting promised that this time would be different. Problem is that she may be in her late 80's and a crappy money manager, but she's our mother and we have to take care of her.

On the flip side, she has been told that we are fed up and the next step is losing everything and moving to the big D to a senior living home (without a car), so just maybe there are signs that she's seeing the big picture this time.

Not a lawyer, just someone who has had a similar but different situation. I had a son, whom I gifted a vehicle that I had paid off early, because he had financial issues and couldn’t afford to replace his POS jaloppy. My car was only about 3 years old and had ~35K on it, but I could afford to replace it. Six months later, he trades it off, below it’s trade-in value, for a new Chevy pickup. That was the last time I bailed him out. What you are describing sounds like an individual with a short term memory for good deeds that have been offered to her. I don’t know the situation and I’m not making any judgments, but it sounds like you’re trying to twist all sorts of things just to avoid having mom learn a lesson she Should have already learned. Again, no offense meant, but my 2 cents worth.

She’s in her late 80’s, “had several collisions”, and can’t be trusted with money (or assets)...

I think the first question to be asked is should she even BE driving.

Legally, there is no culpability if your mother gets into a severe accident and injured herself or an innocent party, but ethically and morally there is.

^^^^^^
This!

I know it is a tough call, I had to take my mother's car away from her.

Tough love.

Trust me, I know the predicament I'm in. And if I'm 100% honest, part of the reason my sister and I are trying to accommodate her where she is, is that it's just an easier fix to let her stay where she is (couple little old ladies sharing living expenses in NC) versus uprooting her against her will, moving her to Dallas to live with my sister (does NOT wish to live with either of us), and taking away her car.

She hasn't been good with money since ever, so that's nothing new. The collisions were not all moving and she wasn't in the vehicle on one of them, but it's still a ding on her record. No easy fixes sometimes, and I think my sister has about decided to just have a stern talking to and hope that nothing will come of trading this car in prior to her getting old enough that she forgets she has one.

Can you become power of attorney for her then lock her credit? Making so any credit score checks would be flagged and need authorization. This way she could never get approved for a new vehicle loan.