Asset Protection

Fraudulent Transfers, Civil Conspiracy, Uniform Fraudulent Transfer Act

February 7, 2020 · 5 min read

What are Fraudulent Transfers? What is Civil Conspiracy? What is the Uniform Fraudulent Act state regarding LLC and creditor claims? Discuss the Single Member LLC within the context of owning public shares in a stock and…

Gr Chevron Down E1600350432643 for revocable vs. irrevocable trust advantages
Quick navigation

Jump to the section you need

Use these quick links to go straight to the answer, example, or planning point that matters most right now.

  1. What are Fraudulent Transfers?
  2. What is Civil Conspiracy?
  1. Asset Protection: Placing Title of Assets in Another Legal Entity
  2. Questions that usually come up next

What are Fraudulent Transfers? What is Civil Conspiracy? What is the Uniform Fraudulent Act state regarding LLC and creditor claims? Discuss the Single Member LLC within the context of owning public shares in a stock and its role in asset protection.

 

Under the Uniform Transfer Act you would be committing a crime, see Section 19.40.041
 
“…(a) a transfer made or obligation incurred by a debtor is fraudulent as to a creditor whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation: (1) with actual intent to hinder, delay, or defraud any creditor of the debtor…”
 
 
Watch the video on
 
Like this video? Subscribe to our channel.
 
Revocable vs. Irrevocable Trust Asset ProtectionLearn how to avoid incorrect transfers in this article (click here)
 

What are Fraudulent Transfers?

 

Fraudulent conveyance has to do with transferring assets at less than the “fair cash value” thereby defrauding a potential creditor or the intentional divesting of assets which become unavailable for satisfaction of the creditor’s claims. Fair cash value means cash or near cash value at the time of transfer, not the price you paid for the asset.
 
For example, you transfer your portion of your equity in your home to your wife for $200.00 and the fair cash value of your portion of the equity was $250,000 (total value of the home was $500,000) or you transfer title to your Mercedes to your brother for $100.00. Additionally the IRS would claim that such a transfer is a gift subject to a gift tax return and assess a penalty for the non-filing of Form 709 (PDF) United States Gift (and Generation-Skipping Transfer) Tax Return.
 

What is Civil Conspiracy?

fraudulent transfers are just a gift to a laymanThe “civil conspiracy theory” has been defined by the courts as (1) an agreement (2) by two or more persons (3) to perform overt act(s) (4) in furtherance of the agreement or conspiracy (5) to accomplish an unlawful purpose or a lawful purpose by unlawful means (6) causing injury to another. To be convincing, the creditor must allege not only the conspirators committed the act but also the act was tortious in nature. The conspiracy alone is not enough to trigger a claim for civil conspiracy without the underlying tort. Lately, however, advisors have been dragged into the creditor claims as co-conspirators for suggesting and implementing everyday common asset protection strategies. This has made me more cautious, making sure that I don’t get dragged in to my own legal nightmare.

 

Example of Single Member LLC Membership Units and Shares in a Public Stock
 
SINGLE MEMBER LLCs should be avoided. The example I can use is this: If you own 1,000 shares of General Motors it’s considered a personal asset subject to a creditor claim. If the claim is perfected by litigation in favor of the creditor the owner of the 1,000 shares of General Motors will have to transfer those shares to the creditor in satisfaction of his claim. Owning single member units of an LLC is not any different. The Owner of the LLC membership units is equivalent to owning the 1,000 shares of General Motors and therefore subject to a perfected creditor claim.
 

Asset Protection: Placing Title of Assets in Another Legal Entity

 

THE CONCEPT OF ASSET PROTECTION includes the possibility of placing title in certain assets in the name of a less vulnerable spouse or other family members, or a legal entity. One should be very attentive in transferring title without an open invitation to a “incorrect transfer” claim against the asset transferred or the possibility of death by the spouse or family member, or possible dissolution of the marriage, or a court judgment.
 
The most common methods of holding assets by INDIVIDUALS:
 
  • Joint Tenancy
  • Joint Tenancy with right of survivorship
  • Tenants in Common
  • Tenancy by the Entirety
  • Community Property
 
LEGAL ENTITIES (Artificial person created by application of law):
 
  • General Partnership
  • Limited Partnership
  • Limited Liability Company
  • Corporation under Chapter “C”
  • Corporation under Sub Chapter “S”
  • Revocable Trust (There are many Revocable Trust variations, since a Trust is nothing more than a Contract)
  • Irrevocable Trust (There are many Irrevocable Trust variations, since a Trust is nothing more than a Contract)
 
To learn more about avoiding conveyance rules and how to avoid civil conspiracy theories when repositioning assets and implementation of precise asset protection systems speak with an experienced and knowledgeable financial planner and advisor in these matters such as Estate Street Partners offering free initial consultations.
 
I always caution against simply speaking with only an attorney and only an accountant in complex financial planning with regards to single member LLC scenarios, partnerships in Limited Liability Company formations, regulations surrounding conveyance and civil conspiracy and asset protection. It’s best to develop or consult with a group or team consisting of an attorney, accountant and financial planner or advisor to offer you the best, well-rounded protection. You will gain a more thorough understanding of the nature of asset protection from LLC formations to avoid incorrect conveyance and civil conspiracy judgments.
 
Read the first part of this article “Fraudulent Conveyance, Civil Conspiracy, Uniform Fraudulent Transfer Act” by clicking here Single Member LLC: Charging Order, Creditor Claims, Pass-through

Helpful resources: For added perspective, readers often compare Asset Protection for Business Owners, LLC vs Trust for Asset Protection, and official SBA guidance before making final trust-planning decisions.

Questions that usually come up next

People exploring Fraudulent Transfers, Civil Conspiracy, Uniform Fraudulent Transfer Act often move next to the practical questions: when to act, what to fund, and how much control can stay with the original owner.

Details that often change the outcome

  • Timing matters because asset protection works best before a claim becomes immediate.
  • Control matters because keeping too much direct control can weaken the protection people hoped to create.
  • Funding matters because creditors usually look at what was transferred, when it moved, and how the structure operates.

What usually helps after the main answer

Many readers narrow the decision by comparing Asset Protection From Lawsuit, Asset Protection Trust, and Irrevocable Trust. When the question turns from reading to implementation, many readers move from these guides to a direct planning conversation.

Related resources

Readers focused on lawsuit pressure usually want to compare what protection needs to be in place before a claim, what counts as risky timing, and which structures still leave gaps.

What people want to know first

The first concern is usually whether protection still works once risk feels real, or whether timing has already become the deciding factor.

What most readers compare next

Trust structure, entity structure, and transfer timing usually become the next practical questions.

When a conversation helps more

Once structure, timing, and next steps start intersecting, it usually helps to talk through the options in the right order.

Explore Asset Protection From Lawsuit

Review how timing, creditor pressure, and pre-claim planning change the strategy.

 Explore Asset Protection

Review the main introduction to asset protection planning and the core decisions that shape a stronger structure.

 Explore Irrevocable Trust

Understand how irrevocable trust planning works, when people use it, and what tradeoffs usually matter most.

 Explore How It Works

Follow the planning process from consultation through drafting, funding, and the next practical steps.

 Explore Ebook

Download the guide for a longer walkthrough you can read at your own pace and revisit later.

 Explore Main Blog

Browse more practical articles, comparisons, and next-step guidance across the full UltraTrust blog.

What people usually compare next

Most readers compare structure, timing, control, and the practical next step after narrowing the issue in the article above.

What usually makes the answer more specific

Actual ownership, funding, current exposure, and how much control someone wants to keep usually matter more than labels in isolation.

When another step helps more than another article

Once timing, structure, and next steps start overlapping, it often helps to talk through the sequence instead of trying to compare everything mentally.

Questions readers usually ask next

Lawsuit-focused readers usually want clearer answers around timing, transfer risk, creditor access, and which structure still leaves avoidable gaps.

Can a protection plan still help once a lawsuit feels close?

That usually depends on timing, transfer history, and whether the structure was created before the pressure became obvious. The closer the threat, the more important the facts become.

Why do readers keep comparing trust planning with entity planning in lawsuit situations?

Because they solve different parts of the problem. Entity planning often addresses operating liability, while trust planning is usually part of the conversation about where personal wealth is held.

What often changes the answer in creditor-protection planning?

Transfer timing, funding, retained control, and the facts surrounding the claim usually change the answer more than broad marketing language ever does.

When is the next step to review structure instead of just asking broader questions?

It usually becomes a structure question once the discussion turns to real assets, current ownership, and whether the plan needs to work before a known problem gets closer.

Continue reading

Ready to take the next step?

Get clear guidance on trust structure, planning priorities, and the next move that fits your assets and goals.

Contact UltraTrust Call (508) 429-0011
Asset Protection Done Right
UltraTrust®

Estate Street Partners, provider of the Ultra Trust®, a premium irrevocable trust plan

Clearer structure, stronger asset protection strategy, and practical next steps for families, professionals, and business owners who want long-term planning that is easier to understand and maintain.

Contact UltraTrust Read the eBook

Phone: (508) 429-0011

Email: [email protected]

Office: 1560 E. Southlake Blvd, Suite 100, Southlake, TX 76092

Asset protection planning

Trust and estate guidance

Locations and support

Explore articles by topic
Asset Protection Beneficiary of a Trust Derivative Financial Instrument Strategy Divorce Estate Planning Estate Planning and Trusts Financial Planning Grantor Trusts Insurance Irrevocable Trust Irrevocable Trust Probate Protection Lawsuit Medicaid Nursing Home Offshore Prenuptial Tax Trust and Asset Protection Trust Planning Professional Services Trust Protection Trusts UltraTrust Wealth Management

Information on this site is provided for general educational purposes and should not be treated as legal, tax, or financial advice for your specific situation.

Blog FAQ Privacy Policy Contact
© 2026 UltraTrust® by Estate Street Partners. All rights reserved.