Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi - my name is Chris and I'm a Bankruptcy and Consumer Protection attorney here to assist you.
1) How long ago was the gift given to friend (b)?
2) Was friend (a) solvent or insolvent when the gift was given? (Solvent means total assets exceeded total debts.)
There were two payments. Half of the gift was given a couple months earlier and the balance was given a few weeks before being diagosed with terminal cancer. The company and individual are still solvent. No bankrupsy was filed and there are future expectations of revenue that will be paid to the IRS. It's expected to close without owning any money but very hard to determine. The friend (A) is a plaintiff's attourney and has cases that will settle or be awarded judgements for new revenue. The company/estate may not hit bandrupsy ever. I am asking in case there is a shortage and the IRS is owed money from the estate, will they go back to the reciepant of the monitary gifts for repayment to the estate?
Thank you for your response.
There are 2 factors the Bankruptcy court looks at to help determine whether a pre-Bankruptcy transfer of assets (aka gift) can be deemed a "fraudulent transfer", and therefore reversed. Those 2 factors are how much in advance of the Bankruptcy the transfer was made (in this case less than 2 years before filing), and whether or not the Bankruptcy filer was solvent at the time of the transfer (gift).
In order for a gift to be deemed a "fraudulent transfer", and therefore subject to forfeiture, that gift must have been given less than 2 years before the Bankruptcy filing and the Bankruptcy filer must have been insolvent at the time the gift was given.
Since friend (a) was solvent at the time the gifts were given, friend (b) will not have to give up his or her home if friend (a) files a Bankruptcy.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).