As a general rule, a creditor cannot challenge as a fraudulent conveyance any transfers of assets made more than four years ago. I use the four year statute of limitation applicable to fraudulent transfers and conversions as a planning guideline and do not advise most clients to consider additional asset protection tools to protect transfers four years in the past.There are, however, exceptions to this general rule which permits creditors to challenge older asset transfers. Specifically, Florida Statute 726.110 provides that a creditor can challenge as fraudulent an asset transfer to avoid pre-existing creditors for one year after the creditor was or could reasonably have been discovered by the creditor under certain conditions. This Statute gives some creditors the ability to challenge a conveyance no matter how ancient for a period of one year after the creditor’s actual or constructive discovery.
The Statute seems preserves creditors’ rights in certain circumstances where, for example, a debtor has concealed an asset conveyance so that the transfer could not reasonably have been discovered, although that condition is not expressly stated in the Statute. I do not think a creditors’ right to challenge effectively transfers is without practical time limits. The farther back in time a debtor has conveyed assets the easier it is to defend the transfer. Assume, for instance, a creditor finds though discovery in aid of execution of a judgement that the debtor transferred title to an asset five or more years ago. This old transfer, if not purposefully concealed, would be difficult to reverse as fraudulent even if the creditor could get by the four year statute of limitations on the grounds of recent discovery under the one-year rule. Effective asset protection is mostly common sense, and older planning done openly is usually easily defended.