Estate Planning and Business Law

Transfer with intent to defraud or transfer not given in exchange for value: Determining actual intent

· (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 as follows:

o (1) With actual intent to hinder, delay, or defraud any creditor of the debtor.

o (2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either:

§ (A) 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.

§ (B) 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.

· (b) In determining actual intent under paragraph (1) of subdivision (a), consideration may be given, among other factors, to any or all of the following:

o (1) Whether the transfer or obligation was to an insider.

o (2) Whether the debtor retained possession or control of the property transferred after the transfer.

o (3) Whether the transfer or obligation was disclosed or concealed.

o (4) Whether before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit.

o (5) Whether the transfer was of substantially all the debtor's assets.

o (6) Whether the debtor absconded.

o (7) Whether the debtor removed or concealed assets.

o (8) Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.

o (9) Whether the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred.

o (10) Whether the transfer occurred shortly before or shortly after a substantial debt was incurred.

o (11) Whether the debtor transferred the essential assets of the business to a lienholder who transferred the assets to an insider of the debtor.


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