Fraudulent Transfer Case Law in Florida

Florida’s fraudulent transfer law gives creditors the power to undo asset transfers designed to put property beyond their reach. The statute defines two types of claims, prescribes how courts identify intent, and sets time limits on when transfers can be challenged.

The cases below define the boundaries between lawful asset protection planning and transfers that courts will set aside.

One of the cases discussed here involves the firm directly. In BankFirst v. UBS Paine Webber, Jon Alper was a named party. The Fifth District’s holding established that attorneys and financial advisors who implement lawful asset protection planning are not liable under Florida’s fraudulent transfer statute.

The FUVTA Framework

Florida’s Uniform Voidable Transactions Act (FUVTA), codified in Chapter 726, replaced the former Uniform Fraudulent Transfer Act (FUFTA) with updated terminology but the same analytical framework. The statute creates two categories of voidable transfers.

An actual fraud claim under § 726.105(1)(a) requires proof that the debtor made a transfer with actual intent to hinder, delay, or defraud a creditor. Because debtors rarely admit fraudulent intent, courts evaluate intent through circumstantial factors known as badges of fraud. The statute lists eleven factors that courts use to evaluate intent. These include whether the transfer was to an insider, whether the debtor retained control afterward, whether a lawsuit preceded the transfer, and whether the debtor moved substantially all assets.

A constructive fraud claim under § 726.105(1)(b) does not require intent. It applies when the debtor made a transfer without receiving reasonably equivalent value and was insolvent at the time of the transfer or became insolvent as a result. Constructive fraud also applies under § 726.106 when the debtor made a transfer without reasonably equivalent value while engaged in a business or transaction for which the debtor’s remaining assets were unreasonably small.

The statute of limitations is four years after the transfer, with a one-year discovery exception for actual fraud. A bankruptcy trustee can pursue avoidance actions until two years after filing or the state statute period expires, whichever is later. Self-settled trust transfers face a ten-year lookback under 11 U.S.C. § 548(e)(1).

Mane FL Corp. v. Beckman (Fla. 4th DCA 2023)

The Fourth District’s decision in Mane FL Corp. v. Beckman, 355 So. 3d 418 (Fla. 4th DCA 2023), is the most recent Florida appellate decision applying the badges of fraud analysis. The court affirmed summary judgment setting aside a real estate transfer as fraudulent, identifying seven badges of fraud in the undisputed record.

The facts involved a debtor who transferred property to insiders for nominal consideration while a lawsuit was pending. The insiders sold the property and used the proceeds to purchase a condominium unit in a new entity’s name. The court found each badge independently. The transfer was to insiders. The debtor was sued before the transfer. The consideration was nominal. Substantially all assets were moved. The debtor retained beneficial use and was insolvent afterward. The transfer occurred shortly before a substantial debt was incurred.

The court also rejected the recipient’s good-faith defense. Under § 726.109(1), a transferee who took in good faith and for reasonably equivalent value has a defense to the fraudulent transfer claim. The court found the defense unavailable because the consideration was nominal and the circumstances would have put a reasonable transferee on notice.

The case demonstrates that four or more badges of fraud can support summary judgment without the creditor needing to prove a single statement of fraudulent intent. Courts evaluate the totality. A contemporaneous solvency affidavit is the single most effective defensive tool a debtor can produce when a transfer is later challenged.

Wells Fargo Bank v. Barber (M.D. Fla. 2015)

Sabrina Barber was an Alper Law client. The Barber case is analyzed in detail on the charging orders case law page, but the fraudulent transfer dimension is equally significant.

After a summary judgment was entered on a $62.5 million deficiency, the debtor transferred substantially all remaining assets to a sole-member Nevis LLC. The court found sufficient badges of fraud: transfer after an adverse judgment, transfer of substantially all assets, insider transfer to a debtor-controlled entity, retained beneficial use, and effective insolvency afterward.

The case illustrates a pattern the firm sees in consultations. A debtor facing an existing judgment transfers assets to an entity, retains control, and assumes the entity’s foreign organization provides protection. The transfer fails because the badges of fraud analysis does not depend on where the receiving entity is organized. A transfer made with fraudulent intent is voidable regardless of whether the assets end up in a Florida LLC, a Wyoming LLC, or a Nevis LLC.

Husky International v. Ritz (U.S. 2016)

The U.S. Supreme Court’s decision in Husky International Electronics, Inc. v. Ritz, 578 U.S. 356 (2016), expanded the reach of fraudulent transfer law into bankruptcy nondischargeability. The Court held that “actual fraud” under 11 U.S.C. § 523(a)(2)(A) encompasses fraudulent conveyance schemes, not just affirmative misrepresentations.

Before Husky, some courts required a creditor seeking nondischargeability to prove the debtor made a false representation and the creditor relied on it. The Supreme Court rejected this limitation. It held that a debtor who siphons assets through fraudulent transfers to avoid paying a creditor has committed “actual fraud” even without making any direct misrepresentation.

The practical consequence is severe. A debtor who engages in fraudulent conveyance and later files bankruptcy may find that the underlying debt survives the bankruptcy discharge. The transfers themselves become the evidence of fraud that prevents the fresh start bankruptcy is designed to provide.

In re Rensin (Bankr. S.D. Fla.)

The bankruptcy court’s decision in In re Rensin, 600 B.R. 870, created a planning pathway that most practitioners overlook. An offshore trust’s trustee used trust funds to purchase a Florida annuity for the debtor. The creditor argued this constituted a fraudulent conversion under § 222.30, which limits the exempt status of assets converted from non-exempt form.

The court held that the purchase was not a “conversion by the debtor” because the trustee, not the debtor, made the purchasing decision. Section 222.30 requires the debtor to be the person who converts non-exempt assets into exempt form with fraudulent intent. When an independent trustee exercises discretionary authority to purchase an annuity, the debtor has not performed the conversion.

The case matters for offshore trust planning. An offshore trustee who independently decides to purchase a Florida-exempt asset for a beneficiary may create exempt property that the beneficiary’s creditors cannot challenge under § 222.30. The key requirement is genuine independence. A trustee who acts at the debtor’s direction does not provide the same protection.

Rosenberg v. U.S. Bank (Fla. 2023)

In Rosenberg v. U.S. Bank, 360 So. 3d 795 (Fla. 2023), the court set aside a transfer of a judgment to a trust under Florida Statutes §§ 56.29(3) and (6). The debtor had assigned a judgment to a trust, attempting to place the judgment proceeds beyond the reach of creditors.

The court treated the assignment as a transfer subject to FUVTA analysis. The transfer was voidable because it was made without reasonably equivalent value and rendered the debtor unable to pay existing debts. The case confirms that FUVTA applies to all types of property, including choses in action and judgment proceeds, not just real estate and bank accounts.

Wiand v. Lee (Bankr. M.D. Fla. 2017)

The Wiand v. Lee decision addressed the practical problem of tracing fraudulently transferred funds that have been commingled with legitimate funds in a single account. The court applied the lowest intermediate balance rule (LIBR), which traces tainted funds by tracking the account’s lowest balance between deposit and the creditor’s claim.

If the tainted funds are deposited and the account balance later drops below the amount deposited, the tainted funds are presumed to have been spent first. Only the lowest intermediate balance remains traceable. This rule creates a practical constraint on recovery: the longer commingled funds sit in an active account, the harder they become to trace.

For asset protection planning, the Wiand tracing methodology underscores why keeping exempt and non-exempt funds in separate accounts matters. Commingling exempt wages with non-exempt funds forces the debtor into a tracing fight that the LIBR rule makes difficult to win. Keeping head of household wages in a separate account avoids this problem entirely.

BankFirst v. UBS Paine Webber (Fla. 5th DCA 2003)

Jon Alper was a named party in BankFirst v. UBS Paine Webber, Inc., 842 So. 2d 155 (Fla. 5th DCA 2003). The case arose when a creditor sued the debtor’s attorneys and financial advisors, alleging they conspired with the debtor to make fraudulent transfers.

The Fifth District affirmed dismissal. The court held that neither § 222.30 nor Chapter 726 (then FUFTA, now FUVTA) creates a cause of action against a party who assists with asset transfers but never takes possession of the property. The court drew a line between the debtor and transferee, who are liable, and the professionals who advised on the planning, who are not.

The dissent argued that lawyers who knowingly help a debtor defraud creditors should face liability. The majority rejected this position, relying on federal circuit authority holding that fraudulent conveyances are not common-law fraud and that the statutory remedy runs against the transfer itself, not against advisors.

The Florida Supreme Court later addressed the broader question in Freeman v. First Union National Bank, 865 So. 2d 1272 (Fla. 2004), holding that there is no cause of action for aiding and abetting a fraudulent transfer under FUFTA. The BankFirst and Freeman decisions together establish that implementing lawful asset protection planning does not expose counsel to FUFTA liability, even when the planning involves transfers that a creditor later challenges.

Defensive Planning: What the Cases Require

The case law above identifies the factors that determine whether a transfer survives challenge. Timing is the most important variable. Transfers made before any claim exists face no fraudulent transfer challenge because there is no creditor to defraud. Transfers made after a claim exists must overcome the badges of fraud analysis.

Documentation at the time of transfer is the strongest defense. A contemporaneous balance sheet, solvency affidavit, and written statement of non-creditor purpose (estate planning, tax planning, family wealth management) create a record that directly rebuts multiple badges. Receiving reasonably equivalent value for the transfer eliminates constructive fraud claims and supports a good-faith defense.

Offshore trusts can be established both before and after lawsuits are filed. Pre-claim transfers are stronger because they avoid the badges analysis entirely. Post-claim transfers require more careful structuring but remain viable when the trust includes a Jones clause that addresses the existing creditor, the funding is genuine, and the trustee is a truly independent foreign fiduciary. The honest tradeoff is higher risk and weaker negotiating position compared to pre-claim planning, but the settlement dynamic still favors the debtor when enforcement requires litigation in the Cook Islands.