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Fraudulent Conveyance and Transfer of Property

Fraudulent conveyance is a civil (not a criminal) matter wherein assets are transferred with the intent to hinder or delay creditors. Whereas it is ideal to protect assets before trouble arises, in reality, many people do not realize the need until it is too late. So prepare for a lawsuit before it strikes if you can. However, if it is too late and you have not yet done so, don’t worry. There are ways to protect yourself after the fact.

Many people think that fraudulent conveyance, also known as fraudulent transfer, means that once you find yourself dealing with a creditor, nothing much can be done to move your assets to protect them. Not true. If you can put up a fight why not do it?

There are a few strategies that can be employed late in the game. For example, offshore asset protection trusts take the assets outside of the local court’s jurisdiction. So even if your opponent jumps up and down and screams “fraudulent transfer” your offshore trustee can lace his hands behind his head, lean back in his chair and look out at the palm trees wafting in the sea breeze because your local courts do not have jurisdiction in his country.

If you ask the trustee to send trust funds to your legal opponent and that request is made against your will, your trustee will support your true desires, invoke the duress clause and refuse to comply. You have done your part in doing what the judge has ordered and asked the trustee to bring back the funds. So, as long as your trust is properly established, a judge would be hard-pressed to find you in contempt for something that you have no ability to do firsthand.

This leaves your opponent a very expensive and time-consuming option: To file a lawsuit offshore. Even if he does, he will find himself in an obstacle course intentionally built with the intent to make it unlikely for him to win. A pride of lions most often eat the weakest members of the herd. So, why let yourself be easy prey? Why not be the one that puts up the biggest fight?

This is not to say that you should engage in fraudulent conveyance. It is best that you do not. It is much better for you prepare for the near inevitable and set up an asset protection plan before you need it. So, this seemingly obstinate dialogue intends to give an editorial angle on the subject and is not encouraging you to participate in this practice. It is simply saying that those who have the philosophy “I’m not going down without a fight,” put the odds in their favor over those who easily cave in.

Lawsuits leave a public trail. If your legal reputation says, “When a litigant says ‘jump’ you ask ‘how high?’” you might as well put a giant “sue me” sign on your back.

Legal and ethical asset protection can be done before a confrontation with a plaintiff’s lawyer or creditor arises. So if you can, why not do it right and prepare yourself before you need it?