![]() As I’ve already mentioned, the transfer may even have been done before the debtor knew of a claim. But there is no need to prove that the debtor actually planned to defraud the creditor. The two laws are nearly identical and can be discussed as one.įraudulent transfers fall within two categories: Fraud-in-law or constructive fraud.įraud-in-law occurs when: there is a gift or sale of the debtor’s property, and it was for less than fair market value, and took place in the face of a known liability and the transfer rendered the debtor insolvent or unable to pay the creditor.Įach element must exist for there to be practical fraud or fraud-in law. In their effort to categorize the transfer as fraudulent, the creditor will rely upon either the Uniform Fraudulent Conveyance Act (UFCA) or the Uniform Fraudulent Transfers Act (UFTA). ![]() Although, some authority exists for the proposition that a transfer to a single purpose trust, designed to protect assets from future unanticipated creditors, is permissible.įor any creditor to successfully attack debtor transfers, they must prove the transaction was fraudulent – that it hinders or delays their rights as a creditor to reach the debtor’s property. Every transfer with the “actual intent” to delay, hinder or defraud creditors is subject to attack, even if the creditor is a future unanticipated creditor at the time of the transfer. ![]() All of the sets of domestic fraudulent conveyance laws, under which a transfer to an asset protection trust might be analyzed, have one thing in common. ![]()
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