Fraudulent Conveyance

A conveyance is a transfer of ownership. You make a conveyance when you move an asset from one owner to another. Funding an asset protection plan can involve transfers like this.

Creditors have legal tools to challenge certain transfers. The recording focuses on a central rule: a transfer made with the intent to hinder, delay, or defraud a creditor may be undone. This is commonly called fraudulent conveyance or fraudulent transfer.

That means you cannot assume that moving assets into a trust or company will solve a creditor problem that already exists. The transfer itself may become part of the dispute.

The practical lesson is to plan before a problem arises. Once you have assets worth planning for, learn about your options and take appropriate steps early. Do not wait for a lawsuit to become the reason you begin.

Early timing is helpful, but it is not a blanket guarantee. Some transfers can be challenged for reasons other than actual intent, including certain transfers made without adequate value while financially distressed. Your lawyer needs the full facts about claims, debts, and finances before assets move.

The next concept asks who may have the most at stake when a lawsuit arrives: the people in what Douglass calls “The Target Zone.”