What does Florida’s Fraudulent Transfers Act have to do with your Estate Plan in West Palm Beach?
Have you ever heard of Fla. Stat. 726.105? Why are we talking about fraudulent transfers on a probate blog?Many debtors in West Palm Beach want to use trusts and other probate devices to avoid creditors. The question becomes, does it work? How much do you know about asset protection in West Palm Beach?
Fraudulent Transfers
- Florida utilizes the Uniform Fraudulent Transfers Act to protect creditors from fraudulent conveyances.
- What is a fraudulent conveyance?
- In essence this is when you move property around with the specific intent of hindering your creditors.
- For example you may know that annuities are exempt from judgment in Florida.
- That does not mean the Florida Courts are going to be ok with a debtor liquidating their bank accounts and buying a huge annuity.
- Many bankruptcy courts in Florida have set that aside.
- What about trusts?
Trusts and Creditor Avoidance
- Trusts provide a unique opportunity to protect assets but how do they work against creditors.
- Certain irrevocable trusts may be protected from creditors.
- That being said you cannot simply change the trust when you know the creditor is on their way to levy.
- What stops you?
- This is where the Fraudulent Transfers laws come into play.
- If the Court thinks you are taking actions to hinder, defraud or infringe the rights of creditors you need to watch out.
- Florida Courts are more than willing to claw back trust funds and reverse trust amendments if you are obviously avoiding a creditor.
- In other words this is not a safe way to go about protecting your assets in West Palm Beach.
- For that you may need to try a foreign trust also called an offshore trust.
- How much do you know about foreign trusts compared to domestic trusts?
- What other tools are at your disposal to protect your assets in West Palm Beach?
- Have you considered using the homestead rules to guard your home from creditors during probate?