Why Protecting Your Assets Now Is Your Best Bet
By Josh Bennett on March 22, 2014 - Category: Assets Protection
Everyone knows that being proactive is far better and more effective than being reactive. Being proactive means taking the time to make solid decisions that protect your endeavors, and is always preferable to making impulse decisions in haste or waiting until it is too late. In the realm of asset protection, reactively attempting to shield your assets from creditors may not only be ineffective but downright illegal.
Fraudulent Transfer Rules
Fraudulent Transfer Rules vary from state to state, but all are designed to prevent asset holders from deliberately shielding their assets in order to hinder, delay, or defraud one or more creditors. Proving actual intent is, in itself, difficult because it requires knowing the mindset of the person/debtor making the asset transfer. So, courts look for certain circumstantial indicators, commonly referred to as “fraud badges,” concerning the debtor (an individual or a business) that might reveal intent, such as:
- Were the debtor’s assets removed or concealed only once threat of litigation arose?
- Were they transferred for substantially less than their worth?
- Did the assets involved comprise most or all of the debtor’s assets; i.e., did the transfer cause them to become insolvent?
- Did the debtor transfer to an “insider,” such as a family member?
- Has the debtor retained possession or control of the assets after the transfer?
- Was the transfer concealed (vs. made public)
- After the asset transfer, did the debtor flee?
If you attempt to conceal assets in such a way as to willfully avoid having them seized by a creditor, such as in a bankruptcy, the court will attempt to assess your mindset at the time of transfer.
It makes sense to protect yourself against that possibility by legally shielding your assets from any potential risk as early as possible. The longer your otherwise vulnerable assets sit in any form of asset protection trust while not at actual risk, the better it will be for you.
Don’t hesitate—educate yourself now on how to best safeguard your assets to ensure financial security for you and your family. Contact me or any other licensed asset protection attorney and find out what your options are. Do it today.