What Is The Statute Of Limitations On A Fraudulent Transfer

by Bruce Givner on October 14, 2011

If you transfer an asset, how long must you wait before the transfer is protected from a charge of being a fraudulent transfer? In California the statute of limitations on a fraudulent transfer has three parts: 4 years – 1 year – 7 years. Here’s what that means. If you transfer an asset, the creditor has 4 years from the date of transfer to claim that it was actually a fraudulent transfer. Once 4 years have expired, he cannot make that claim. However, if the creditor was unaware of the transfer, and most creditors are unaware, then the creditor has an additional one year after becoming aware to make the fraudulent transfer claim. However, in no event can the fraudulent transfer claim be made more than 7 years after the transfer. You have an advantage when transferring real estate because real estate transfers must be recorded with the County Recorder. And a recorded deed is deemed to give notice to the world. So even if the creditor is unaware of your transfer of your home, for example, to a qualified personal residence trust, the creditor only has 4 years to complain that it was a fraudulent transfer.

In future blogs we’ll discuss what happens if only a couple of years have passed since you made the transfer, and we’ll discuss the fraudulent transfer statute in Nevada.

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