By Quentin Fottrell
‘They declare him as a dependent for tax purposes’
Dear Quentin,
A relative and I have a disagreement. A mutual friend and his wife live in Wisconsin. They have a 32-year-old son who still lives at home. His parents provide almost all of his support – food, clothing, etc. They declare him as a dependent for tax purposes. Their son has his own car and it’s titled in his name alone. He is driving without insurance.
My relative says the parents could be held liable if he gets into a car accident, as he is their legal dependent. I say they couldn’t be, because he’s an adult, it’s his car and he’s on the registration. Also, simply having someone who is a dependent for tax purposes shouldn’t make you legally liable for that adult. Are there any states where a parent can be held legally responsible for the car accidents of a dependent adult child?
Who is correct?
Disagreeing, Agreeable Friends
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Dear Friends,
You’re both right. It’s possible, but probably unlikely.
Ultimately, it would depend on the circumstances of the accident and on the state where they live. Without doing a 50-state deep dive into the intricacies of personal-injury law, if their son is over the age of 18 (or 21 in some states) it removes the threat of liability, especially – as you say – if the parents don’t own the car and are not responsible for its maintenance.
Parents can be held liable for the accidents of their minor children, but it’s more complicated when that child is no longer legally a minor in their state. “A parent can be held liable for the accidents of their adult child as long as the child is a legal dependent and is claimed as a tax dependent on the parent’s tax return,” says Jon Alper from Alper Law, based in Lake Mary, Fla.
“So, even if you are not on the title to your child’s car, and the child had their own insurance, you still could be liable for their accidents if they are your legal dependent,” he says. “In that circumstance, you should raise the liability limits on the child’s separate insurance to match the parents’ liability levels in order to bring the child under the parents’ umbrella liability policy.”
He adds: “Parents can be liable if they own the vehicle involved in the accident, if the accident occurred while the child was performing a task for the parents, or if the parents negligently entrusted the vehicle to an unfit driver.” Negligent entrustment occurs if they know their dependent is inexperienced, unlicensed or unfit to drive, and that results in an accident, he notes.
For any parents reading this column, I have a warning. If your child borrows your car, you may be responsible if there’s an accident. California, Texas, New York and many other U.S. states have vehicle and traffic laws on “vicarious liability.” That means you may be responsible for what happens with your vehicle even if you are not the one driving it.
“Every owner of a vehicle used or operated in this state shall be liable and responsible for death or injuries to person or property resulting from negligence in the use or operation of such vehicle, in the business of such owner or otherwise, by any person using or operating the same with the permission, express or implied, of such owner,” New York law states.
It’s heartening that you both care enough to have such a debate over a friend’s family, and it may speak to the fact that you don’t have any such problems of your own – that you know of. People don’t often welcome unsolicited advice about their family dynamics, so I expect – unless there is cause to raise the subject – that your concerns will remain purely theoretical.
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The Moneyist regrets he cannot reply to questions individually.
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‘I don’t want to spend my remaining days living hand to mouth’: I divorced my husband and remarried. Can I claim his Social Security?
My grandfather co-signed my cousin’s student loan. After my grandfather died, my cousin skipped town. Will the estate have to pay the debt?
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-Quentin Fottrell
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.