Many attorneys are reticent about asset protection work because they fear exposing themselves to personal liability for assisting their clients’ transfer of assets to avoid exposure creditor claims. Florida’s fraudulent conveyance statutes do not specifically address liability of third parties, including a debtor’s attorney, who advise and assist the debtor with a transfer or conversion which is subsequently deemed a fraudulent transfer or conversion. Until recently, no Florida appellate court has addressed the issue whether a cause of action exists against an attorney, as well as other third parties for assisting a fraudulent asset transfer or fraudulent conversion pursuant to §222.30 or §726.101 of the Florida Statutes.
Three Florida appellate cases address third party liability for fraudulent conveyances. Each appellate court held that there is no potential liability for debtors’ attorneys, financial advisors, accountants, and any other party whether or not an agent of the debtor, for any involvement in aid of the fraudulent conveyance short of actually possessing the transferred property.
In May 2003, the Eleventh Circuit Court of Appeals certified to the Florida Supreme Court the question of whether, under Florida’s Uniform Fraudulent Transfer Act (or FUFTA) there is a cause of action for aiding and abetting a fraudulent transfer when the alleged aider-abettor is not a transferee. The Supreme Court’s unanimous answer was an unqualified “No.” After considering legislative intent, the Supreme Court stated, “There is simply no language in FUFTA that suggests the creation of a distinct cause of action for aiding-abetting claims against non-transferees. Rather, it appears that FUFTA was intended to codify an existing but imprecise system whereby transfers that were intended to defraud creditors were to be set aside.” The Court further stated, “Consistent with this analysis we conclude that FUFTA was not intended to serve as a vehicle by which a creditor may bring a suit against a non-transferee party’s alleged aiding and abetting of a fraudulent money transfer.”
This unanimous decision impacts all attorneys, accountants, bankers, and any other person who provides services to people transferring their assets.