Avoid the Trap of a Fraudulent Conveyance

Courts may sometimes disallow the transfer of assets into a trust if it is done to avoid a certain debt of piece of litigation. It is vital to move the assets into a trust when there is no specific threat faced so that the transfer can survive litigation if it is challenged.

Make Sure the Timing Is Right

Once you have already been sued, or a creditor has begun to seek payment of a certain debt, it will be too late to affect a transfer of the asset. There must be a judgment or a debt that you are trying to avoid in order for a court to rule that something is a fraudulent conveyance. Even if an asset is being moved into a trust as opposed to being given to someone else, there can be such a thing as too late. It is better to act well in advance of when you think that you may need the protection of the trust.

There Does not Need to Be Actual Fraud

Courts can find that transferring assets into the trust constitutes constructive fraud. When moving assets into a trust, it is best to be as upfront as possible so a later court can understand your reasoning for moving assets to a trust. Document and explain the explanation for your actions so you can keep your intentions above board. The alternative is that a court can reach your assets and take them from the trust.

Work With an Attorney

A trust administration lawyer in Las Vegas can help you structure and time the transfer of assets into a trust in order to ensure that it remains valid and your assets stay yours. If the transfer is not done correctly, it is as if the transfer never happened at all. An attorney can work with you to select different trust structures and find the right jurisdiction in which to establish your trust. Establishing a trust is not something that should be done yourself.