Can I transfer my property to an LLC without having the tax lien follow it?
Full Question:
I have a state tax lien on me. I own a few rental properties, could I transfer my property to an LLC without having the tax lien follow it?
05/26/2009 |
Category: LLC |
State: Texas |
#16786
Answer:
If a transfer is created with knowledge of an impending claim, it is possible the transfer could be challenged as a fraudulent conveyance. For example, creating a trust right before filing bankruptcy may throw up red flags for examination.
The elements of a fraudulent conveyance transfer are defined as follows by the Uniform Fraudulent Transfer Act:
(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(ii) intended to incur, or believed or reasonably should have believed that he [or she] would incur, debts beyond his [or her] ability to pay as they became due.