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Originally Posted by Pete Cliff, I'm not sure either but there have been plenty of examples over here that have been reported in the popular press, (and we know they are never wrong) where charlatans have gone broke and been sent to jail and assets
have seemingly been lost in a maze of family trust's and distributions and very little of the money has been recovered for the creditors.
Alan Bond and Christopher Skase are two famous examples. |
Hi Pete, yes, two notable examples indeed! I think there are really two seperate issues here which may be confounding things - the notion of seperate, or joint, assets (between h and w) is different than the notion of a preferential transfer. A preferential transfer is a transfer of wealth outside of the marital estate totally - to a trust or another family member altogether, just as you gave examples of. And, yes, you're exactly correct, people make such transfer specifically for the purpose of protecting assets against liability. For such transfer to really be effective/protective however it must generally be made in such a way that control of the asset is lost by the transferor otherwise it will be deemed ineffective and brought back into the marital estate. Finally, where such preferential transfers are made on the eve of bankruptcy, most bankruptcy courts will "reach out" and bring the asset back into the bankrupt debtors estate so the administrators have the value to use to attempt to pay of creditors. It's a messy process.....
Really hope some of the unfortunate people who put money down up front get some $ back but it's not usually the case, particularly for unsecured creditors such as these folks....