Florida’s fraudulent transfer law is for the most part the enactment of the Uniform Fraudulent Transfer Act. The Uniform act is adopted by most, if not all, states including Florida. On July 16, 2014, the National Conference of Commissioners on Uniform State Laws (NCCUSL) unanimously adopted the Uniform Voidable Transactions Act to replace the Unifrm Fraudulent Transfer Act.
Generally, when a spouse who is subject to a money judgment transfers his separate property to joint ownership with his non-debtor spouse, the transfer is subject to challenge as a fraudulent conveyance. The issue is complicated when the debtor spouse deposits money he earned himself in to a pre-existing joint bank account.
A man agreed to set up a trust for his ex-wife that would leave her $100,000 upon his death. The man set up trust, but he did not fully fund the trust. Instead, he purchased an annuity for his new wife. The man dies and the ex-wife sues the man for making a fraudulent transfer to his new wife.
Often, clients facing a significant judgments ask me whether they should divorce their spouse for asset protection. They consider a legal divorce in which their non-debtor spouse would receive all of the debtor’s non-exempt assets. The issue is whether a court’s divorce decree immunizes the debtor and his ex-spouse from fraudulent transfer actions.
Fraudulent transfer law casts a big net, and courts will undo almost any transfer that is clearly intended to avoid present or even future unknown creditors. In this case, a California appellate court reversed a transfer of assets to a Nevada asset protection trust four years prior to a creditor’s lawsuit being filed.
Here’s is an interesting case where a bankruptcy trustee sued the U.S. government for their receipt of a fraudulent transfer. Within two years of filing bankruptcy a company, taxable as an S-Corp, paid the IRS money to satisfy their owners’ tax liability attributable to company income. The bankruptcy trustee argued that these tax liability payments were fraudulent transfers, and he …
A Florida married debtor deposits paychecks payable to himself into a tenants by entireties bank account; is the deposit into the entireties account a fraudulent transfer when the debtor’s wages are exempt from garnishment?
More than four years ago you engaged in asset protection planning in which you transferred title of your assets from your name to the name of another family member or legal entity. Just recently, one of your judgment creditors discovers the transfers. Is it too late for the creditor to sue for fraudulent transfer?
When is a debtor’s conveyance of non-exempt money to a charitable organization a fraudulent transfer? Does the debtor’s charitable intent immunize the debtor from allegations of an intent to defraud his creditors?
This Connecticut case caught my attention, not because it establishes new law, but because it addresses a common asset protection mistake. Many of my new clients believe they may protect their assets by simply transferring non-exempt assets to their non-debtor spouse. As this case illustrated, the answer is almost always, “no”.