Insurance question - umbrella policy

[Rick]

@Inigo Montoya

Well yeah, but that brings us back to: what’s a teenager got in the way of assets that need a $Million in protection*? How effective is a judgement against a minor? If the kid kills a breadwinner and is found liable for tons of money but only has the 100/300/50 on mom & dad’s policy, and mom and dad are legally bulletproof–why bother?

• I loathe this method of planning, but that’s a different matter

My friend addressed in another e mail (I think it must be slow at the office today)

Yeah, right now the kids have minimal assets, etc., but a judgement is good for a long time, years and years. I can’t remember right now, but I think in California it’s good for 10 years, and can be renewed for another 10. Does he want something like that to follow his kids into their adult years, when they might want to be accumulating assets or buying a house? Or does he want them to have to file bankruptcy to get rid of such a judgment, with the attendant black mark on the credit report? Oh, and the fact of the judgment being entered against them will show up on a credit report.

Yes they don’t have squat now, but that does not mean there are not conseqences to getting a large judgement against you. Using the California example above, an judgment at 17 could hang around until the “teenager” is 37.
If you aren’t cash poor, I think it is a good idea. YMMV