comparative-law
A person owes money to the state but has changed ownership on all estates to from hers/his to that of relatives
<p>A person owes money to the state but has changed ownership on all estates from hers or his, to that of relatives.</p>
<p>The writ of execution can't really confiscate these estates, at least without a warrant, because they are all other people's property by now.</p>
<p>Is the law about this pretty much identical in any state or are there some radically different examples from various states (i.e. in one state it would never be confiscated, in one it wouldn't need a warrant, etc.)?</p>
<p>In Israel for example the debtor's (former) estates could be confiscated, but only after a warrant, and I wonder about other states.</p>

<p><a href="/questions/tagged/united-states" class="post-tag" title="show questions tagged &#39;united-states&#39;" rel="tag">united-states</a></p>
<h2>Meet the word &quot;clawback&quot;.</h2>
<p>The general rule is that anything you do <em>simply for asset protection</em> can be undone by the government or courts.  See the excellent book by Adkisson and Riser titled <em>Asset Protection</em>.</p>
<p>First, the creditor <em>is going to ask</em> about all your assets including transfers. You have to answer truthfully, or else you open a whole other can of worms.</p>
<p>The creditor and court will look at the character of these transactions.</p>
<ul>
<li>Suppose you sell a Ferrari worth $200,000 appraised value, to your brother for $155,000. However, it was an open eBay auction. Plaintiffs review it, hoping to find it was a &quot;vest pocket&quot; sale rigged to be unappealing to anyone but family.  Wrong: it was a competent and earnest listing, which did attract 12 stranger bidders, and 3 bidders took up your offer to let them inspect the car. And according to Ferrari brokers that price was realistic given the soft market.   <em>Your brother simply outbid them, for nostalgia reasons</em>. You did get the money and did use it to settle with creditors. <strong>That sale will be considered legitimate, because there's extensive provenance held in reliable third party hands (eBay).</strong></li>
<li>You sell the Ferrari for $100 to your brother.  The court will presume that you intend to buy the car back for $100 after your legal troubles have cleared.  This sale will be declared invalid, the Ferrari clawed back, and the creditor will be able to target that asset.</li>
</ul>
<p>The same thing can happen if you are insolvent, expect to enter bankruptcy, and pay a creditor &quot;out of turn&quot;.  E.G. you settle your debt with the country club (so you can keep attending) before you pay your tax bill.  The creditors, IRS or court can &quot;claw back&quot; that payment. That happened to my family's business once.</p>
<h2>Meet the word &quot;Penalties&quot;.</h2>
<p>OK, so what does a dumb crook do? They lie about their assets. They testify &quot;I crashed the Ferrari on the property, it was a basket case. I parted it out and chopped up the rest, threw it in the weekly trash week by week&quot;.  And they can produce no documentation of any part sales.</p>
<p>Meanwhile, plaintiff had already pulled DMV records and found it's currently registered... to the brother, with a DMV sale price of $100.  They sent over a detective, who has pictures of it sitting in the brother's garage. And plaintiff gleefully maneuvered the dumb crook into a lie under oath.</p>
<p>And now they face judicial punishment - including harsh fines, and jail for contempt of court or refusal to disclose. This bypasses the Fourth Amendment, so there is no trial for proof of guilt.</p>
<h2>But it's a government agency, not a private party</h2>
<p>All the moreso, then. Government has the right to bypass some of the rules for private parties - such as being able to do asset search, subpoena, or attach assets without filing a lawsuit.</p>
<p>The IRS is probably the most experienced at pursuing asset hiders. They have &quot;their own&quot; Tax Court which does exclusively tax cases.</p>

<h2>A bankruptcy trustee can reverse non-commercial transactions</h2>
<p><a href="/questions/tagged/australia" class="post-tag" title="show questions tagged &#39;australia&#39;" rel="tag">australia</a></p>
<p>Assuming that creditors pursue the debt to the point that the person must be declared bankrupt (or be liquidated if a company), then the trustee (or liquidator) can go back 6 months before the person was insolvent and examine every transaction to ensure that it was commercial. If it wasn’t, they can apply to the court to have the transaction voided and the property returned for the benefit of creditors.</p>
<p>So, for example, if real property was transferred from a husband to a wife for less than market value, that would be a  reversible transaction.</p>

<p><a href="/questions/tagged/germany" class="post-tag" title="show questions tagged &#39;germany&#39;" rel="tag">germany</a></p>
<p>In Germany, the situation is mostly the same, independent of whether the creditor is the state, a person or some other legal entity such as a corporation.</p>
<p>According to the <a href="https://de.wikipedia.org/wiki/Anfechtungsgesetz" rel="noreferrer">Anfechtungsgesetz (AnfG)</a>, a creditor can dispute:</p>
<ul>
<li>any donations (or other uncompensated actions) by the debtor during the last four years (<a href="https://www.gesetze-im-internet.de/anfg_1999/__4.html" rel="noreferrer">§4 AnfG</a>)</li>
<li>any action during the last ten years that was taken to give a disadvantage  to the creditor (<a href="https://www.gesetze-im-internet.de/anfg_1999/__3.html" rel="noreferrer">§3 AnfG</a>)</li>
</ul>
<p>Note that to actually seize assets that way, a court judgement is still required.</p>
<p>This law applies if the debtor has not (yet) declared bankruptcy. In case of bankruptcy (<em>Privatinsolvenz</em>), the <a href="https://de.wikipedia.org/wiki/Insolvenzordnung_(Deutschland)" rel="noreferrer">Insolvenzordnung</a> applies instead,   but the rules are similar.</p>

<blockquote>
<p>Is the law about this pretty much identical in any state or are there
some radically different examples from various states (i.e. in one
state would never be able to confiscate, in one it wouldn't need a
warrant, etc.)?</p>
</blockquote>
<p>In U.S. jurisprudence, the transaction that you describe is called a &quot;fraudulent transfer&quot;. The existence of a fraudulent transfer must be established in a separate lawsuit, or in a separate claim within the same lawsuit, or in an adversary action within bankruptcy proceeding, subject to some narrow exceptions for general partners of partnerships for partnership debts and in some jurisdictions for revocable trusts. Sometimes separate fraudulent transfer doctrines apply to people who make or receive distributions from insolvent legal entities or trusts or estates in addition to a more general fraudulent transfer law (the Uniform Fraudulent Transfers Act is part of the law is almost every U.S. jurisdiction and its less expansive predecessor, the Uniform Fraudulent Conveyances Act is part of the law in the rest).</p>
<p>Fraudulent transfer law is fairly uniform in the United States due to the collective adoption of Uniform Acts voluntarily by state legislatures and the impact of the United States Bankruptcy Code (Title 11 of the United States Code). In cases where the bankruptcy code is more favorable than the law outside the bankruptcy code, in certain circumstances, U.S. creditors can also force the debtor into an involuntarily bankruptcy, although in practice, this tool is rarely used because the non-bankruptcy options are adequate.</p>
<p>These doctrines are not more or less uniform across all Western-style legal systems, however, let alone in the case of non-Western legal systems under Islamic, Communist regime, or tribal law, for example.</p>
<p>Many common law jurisdictions other than the United States, including most of the United Kingdom dependencies that are commonly used for asset protection purposes, such as the Cayman Islands and Nevis, also have fraudulent transfer laws (although the exact name of these statutes varies). But, in those jurisdictions the legal standard that must be shown to prevail is much more serious, the statutes of limitations tend to be short, and there are other procedural hurdles to bringing such lawsuits (as well as a debtor friendly judiciary).</p>
<p>Many of these jurisdictions also do not give full faith and credit to judgements entered in other jurisdiction and require the underlying debt to be reestablished legally from scratch in their courts to be enforced against assets in their control. Many (if not most) non-U.S. jurisdictions, likewise, do not honor U.S. tort law case judgments unless reestablished in local courts at least as to damages, even if some facts can be established by virtue of a U.S. court judgment on the merits.</p>
<p>There are also some legal doctrines that impose vicarious liability (i.e. liability without individual fault) on someone other than the person whose actions give rise to the debt. These people are often named as co-defendants in the same lawsuit. This would include members of a household under the family car doctrine, members of a married couple or their close family members under the necessities doctrine between people who have a duty of support for each other, employers for employees, principals for agents, sureties, and guarantors.</p>
<p>In some cases, where the person who transferred the property was a fiduciary for someone (e.g. a trustee, an attorney, an executor, a guardian, or an agent) or was a spouse, it is also possible to bring a separate action (or a separate claim in the same action as the one for the primary debt) to impose a &quot;constructive trust&quot; on the transferred asset which requires the person to whom the asset was transferred to hold the assets received and all proceeds of that asset in trust for the person entitled to it and to deliver it to the person entitled to it as soon as reasonably practicable to do so.</p>
<p>Finally, in some cases, a judgment or monetary obligation can be entered by a court (or sometimes prior to court action, either voluntarily in a mortgage-like instrument, or involuntarily in the case of a tax lien or mechanic's lien, for example) <em>in rem</em> against property. In that case, execution against or legally authorized seizure of the property is authorized without regard to who owns it at the time of the seizure.</p>
<p>In addition to these remedies, it is common in cases involving self-employed debtors in family law cases, in probate cases, and in cases involving asset protection trusts, to hold the debtor and sometimes other responsible individuals who are aware that the transfers were made in an effort to defy a court order or judgment, in contempt of court. Someone held in civil contempt of court in these circumstances can be detained or fined on a daily basis indefinitely until the order is complied with, if the court determines that the person held in contempt of court has the actual ability in practice (even if not as a strict matter of law) to comply. There are cases of people who set up asset protection trusts being incarcerated for as much as a decade for contempt of court.</p>
<p>Similarly, in the case of tax debts, willfully evading collection of tax debts in this manner is not just a civil matter or grounds for a contempt of court citation. It is also a crime (usually a felony) for which the tax debtor and the tax debtors uncooperative coconspirators may be prosecuted and convicted. The punishment for these crimes is typically comparable to the punishment for simple larceny-theft or fraud without violence or wrongful entry onto premises, of comparable dollar amounts.</p>
