In a situation where a person is deeply in debt and creditors are threatening to take his assets in order to pay for what’s owed, it sometimes happens that the debtor will, in an effort to prevent this from happening, transfer the assets to someone else. This isn’t done in the sense of a legitimate sale or gift, but rather just in an effort to keep the creditors from getting the assets. In many cases, the assets are transferred to a friend or family member who is involved in the situation; after the crisis has passed, the debtor can once again take possession of the assets, even if they remain legally in the name of the other person. In the United States, there’s a rule in place to prevent this, with the idea that such false transfers not only cost creditors money, but they, in turn, end up costing taxpayers, too, and creating economic complications for everyone. All but a few of the states have adopted what is known as the Uniform Fraudulent Transfer Act (UFTA), which is used to investigate and prosecute such actions of fraud.
Along with these types of situations, you’ll often find the use of what is known as a quit-claim deed.
If you are in a legal situation dealing with a quit-claim deed in any capacity, you should be prepared to answer questions about the legality of the transfer; similarly, you should investigate any quit-claims that come to you to ensure they’re valid. The UFTA regulations will likely be involved in such an investigation, too, since UFTA violations and quit-claim deeds are so often found going hand in hand. Hiring a lawyer is strongly recommended so you can be sure you do not get yourself into serious financial and legal trouble by trying to use a quit claim deed in violation of the Uniform Fraudulent Transfer Act.