A caller asked me if a debtor could protect assets by legally changing his name and then conveying assets to his new legal name. He reasoned that this would not be a fraudulent conveyance because he was transfer title to himself, just under a new name. This was an innovative asset protection ideal, but it is not a good asset protection plan. The caller did not understand that the fraudulent conveyance statutes also include a prohibition on fraudulent conversions. A fraudulent transfer is when the debtor sells an asset that is not exempt from creditors and buys an asset which is exempt. An example would be selling publicly traded common stock and purchasing an annuity. Annuities are exempt from creditors under Florida law. Fraudulent transfers can be undone under the same rules applicable to fraudulent conveyances.
I ever heard of someone trying this type of asset protection planning involving a name change, and there is no court decision directly on point. However, in my judgment, the caller’s idea of transferring assets to himself under a new legal name would probably be reversed as a fraudulent conversion.
Last updated on May 22, 2020