Fraudulent transfer of assets

When creating an asset protection plan, great care must be taken to transfer assets before any problems (such as a lawsuit) occur. The reason for this rule is given below.

A fraudulent transfer of assets occurs when assets are transferred with the intent to ‘hinder, delay or defraud’ your creditors. If a transfer is found to be fraudulent, a court will void it. Asset protection plans that are created and executed years in advance of need will survive any attack by creditors. You shouldn’t wait for a problem to arise and then consider creating an asset protection plan.

Asset protection plans need to be structured and implemented years in advance of any potential problems. If a plan is established the day after a trial, the plan is worthless. A court may also apply Fraud Badges to determine if the transfer was fraudulent. It is difficult to prove his intent. So fraud badges are used to try to fix things. When a person or business tries to hide assets that are the subject of a debt collection, divorce, or bankruptcy case, a court will look for evidence of fraud. The hallmarks of fraud for fraudulent asset transfers are:

• A close relationship between the parties

• A Transfer Apart from the Regular Business Course

• Inadequate consideration

• Knowledge of a creditor’s claim

• Retention of Property Control

If the fraud insignia is found to be true, then the court can request that the assets be returned to the original owner, where creditors can move to seize the assets. That is why it is important to establish an asset protection plan in advance.