Giving money to your parents in order to avoid paying it back is a fraudulent conveyance. Also called a fraudulent transfer or voidable transaction. In order to prove intent, the court looks for the badges of fraud:
becoming insolvent because of the transfer;
lack or inadequacy of consideration;
family or insider relationship among parties;
the retention of possession, benefits or use of property in question;
the existence of the threat of litigation;
the financial situation of the debtor at the time of transfer or after transfer;
the existence or a cumulative effect of a series of transactions after the onset of debtor’s financial difficulties;
the general chronology of events;
secrecy of the transaction in question; and
deviation from the usual method or course of business.
It seems that a lot of these apply to Sam Bankman-Fried. So I hope that creditors succeed in their clawbacks. Instead of giving to his parents, a better strategy would have been to move to Florida and buy an expensive home. The homestead exemption is in the Florida state constitution, so it can take precedence over their fraudulent conveyance statute.
This worked in part for OJ Simpson and many others. Incidentally, Ken Griffin is building a $1 billion home in Florida –– the most expensive in the world. And he bought another for his mother. So he is kinda combining both strategies –– buying a home and giving to his parents. I’m also thinking that buying the constitution could be related to this somehow.
Giving money to your parents in order to avoid paying it back is a fraudulent conveyance. Also called a fraudulent transfer or voidable transaction. In order to prove intent, the court looks for the badges of fraud:
It seems that a lot of these apply to Sam Bankman-Fried. So I hope that creditors succeed in their clawbacks. Instead of giving to his parents, a better strategy would have been to move to Florida and buy an expensive home. The homestead exemption is in the Florida state constitution, so it can take precedence over their fraudulent conveyance statute.
This worked in part for OJ Simpson and many others. Incidentally, Ken Griffin is building a $1 billion home in Florida –– the most expensive in the world. And he bought another for his mother. So he is kinda combining both strategies –– buying a home and giving to his parents. I’m also thinking that buying the constitution could be related to this somehow.