Part Six

Transfer Assets Early

The best time for you to transfer your assets, perhaps to your spouse, children or a family partnership, is before you're sued or being threatened with a suit. Otherwise, a court could decide that you had the intention to stiff your creditors, whereby the court would brand the transfer "fraudulent" and reverse it. The new bankruptcy law encourages judges to look back at transfers for longer periods before a bankruptcy filing. One section even created a special ten-year lookback for transfers to certain trusts you might have created for yourself. Since 1997 seven states passed laws protecting assets in such "self-settled spendthrift" trusts from creditors. What's now unclear is how well these trusts will protect assets for the out-of-staters who use them. It’s better to transfer assets into a straightforward trust for both your children and grandchildren, and to do it as part of your estate planning.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.