Legal Question in Business Law in California

The problem with all these types of schemes is you would eventually have to lie under oath, committing the felony crime of perjury. People get caught. Sometimes they go to prison.

California, like about 40 other states, has adopted the Uniform Fraudulent Transfer Act, found at Civil Code sections 3439 to 3439.12. There is no doubt that your proposal would violate the UFTA. Whether your asset-protection plan would be discovered depends upon many things, including the amount involved, the aggressiveness of the creditors, the nature of the assets transferred (some, like real estate, would be obvious due to the recording of the deeds) and the length of time such hiding would be necessary. Without knowing more, I'd say chances of discovery are very high. Pay particular attention to 3439.04, which contains a listing of the so-called "badges of fraud," i.e., facts that tend to show a transfer was done with fraudulent intent.

I agree with the prior answers. I write to add that putting cash and assets in an LLC or other business form would accomplish nothing that just putting them in her name would not accomplish, because she would own the LLC and if they can get to accounts in her name, they can also seize ownership of the LLC. The other problem is that, although you can legally give away assets if it is not anticipation of litigation, and does not leave you insolvent and unable to respond to known or anticipated liabilities, there are other problems. If you do it before any liability is on the horizon and leaves you able to pay your debts, it is legal. However, you have to really truly and completely give it away. That means you would have to convert asssets that are now community property or your separate property into her separate property. Once you do that you sure better make sure your marriage lasts, because otherwise she walks away with everything you put in her name and half of anything you don't. On top of that, the majority of debts and liabilities incurred in marriage are community debts. So if there are not enough community assets to satisfy a debt, they can come after her separate property too, for any community liability. There really is only one way to protect your assets from future liabilities: insurance. Think about it. Would insurance companies be in business if there was such a simple way to avoid paying judgments as just putting things in other people's names?