You’ve worked hard and built up some savings. You’ve started or successfully run a business and are planning to enjoy your nest egg. So you have decided that it’s time to protect all those hard-earned assets.
You start by consulting an asset protection attorney to place your money into an asset protection trust or a corporation, but just after the execution of your asset protection plan, disaster strikes. A creditor hauls you into court, and the court finds your transfer of money–your actions to protect your assets–to be a “fraudulent conveyance.”
How could you have avoided this situation? How could you have ensured that your asset protection plan would survive such a challenge?
Combine your asset protection plan with an estate plan. Courts are much less likely to declare a transfer of funds a fraudulent conveyance when that transfer is made as part of your comprehensive estate plan. Transfers of property pursuant to legitimate estate planning are typically not challenged as fraudulent conveyances during periods of regular economic growth.
The case law is clear. In a U.S. District Court case*, the court stated that when considering a fraudulent conveyance challenge, it is important to consider the entire context in which a transfer is made, to look beyond the single transfer itself. The court went on to describe the level of fraudulent intent required to prove fraudulent conveyance, stating that transfers pursuant to a valid estate plan do not reach the requisite level of intent. The court went so far as to state that, even with other clearly fraudulent transfers being made, those transfers made in connection with the estate plan were made without fraudulent intent.
So, whether you are looking for asset protection or estate planning, your path begins with a call to the attorneys at Mile High Estate Planning at (720) 924-6171.
* In re Manshul Const. Corp., 97 Civ. 4295 (S.D.N.Y 2000)