Legal Question in Family Law in California
I live in Alameda County, CA. I have a co-worker (really, a co-worker, not me) who is living with a deadbeat dad. Last week, she helped him hide assets by having several of his vehicles transferred to her. She is the dominant wage-earner in the family (he has been unemployed for 18 of the 24 months they have been together). I am wondering if she could be in legal trouble for helping him hide assets and if her beau's ex could now come after her assets? I am especially worried as she bought a house after they started dating (the deed is in her name and she paid for all of the costs involved in buying it).
1 Answer from Attorneys
Yes, she could get in trouble. Transferring assets to another person in order to avoid paying your debts or judgments is called a fraudulent transfer, and there is a significant body of law on the subject. The person who receives the assets without equivalent compensation can be forced to surrender the assets, and may be liable for attorneys fees and court costs. In most circumstances, however, it would not extend to the receiving party's personal assets acquired independently of the fraudulent transfer. Where it gets really complicated, though, is if the acquired assets get mixed in with the person's other assets. Even then, however, the disgorgement would normally be limited to the value of the assets received fraudulently, plus costs and fees. Of course if you take a transfer of cash or stocks and use it to buy a house that you could not otherwise afford, you could lose that house. So best bet is not to accept assets you don't give fair compensation for. Second best, if you really want to take the chance, is only accept them as gifts and keep them totally separate from your other assets, in case you wind up having to give them up.