# Is helping a relative hide their assets in this manner illegal? **URL:** \ **Category:** Factual Questions\ **Created:** [February 25, 2006, 5:53am UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042 "2006-02-25T05:53:10Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![choosybeggar](https://avatars.discourse-cdn.com/v4/letter/c/8c91f0/32.png) [@choosybeggar](https://boards.straightdope.com/u/choosybeggar)\ **Post date:** [February 25, 2006, 5:53am UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/1 "2006-02-25T05:53:10Z")
Standard disclaimer: Not looking for legal advice. A family member, “Carl,” has a history of deep financial problems. He says that if he deposits money in a bank, his creditors will seize it. He’s working to dig himself out, but you know how that goes. His mother, “Jan,” opened a bank account on which Carl has power of attorney. Carl uses this as his primary account. Jan does not use the account at all. Is Jan doing anything illegal? Is she opening herself to financial liability? They live in NY if that has any bearing. ---
**Author:** ![Harmonious\_Discord](https://avatars.discourse-cdn.com/v4/letter/h/74df32/32.png) [@Harmonious\_Discord](https://boards.straightdope.com/u/Harmonious_Discord)\ **Post date:** [February 25, 2006, 12:59pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/2 "2006-02-25T12:59:11Z")
> [@choosybeggar](#): > > Standard disclaimer: Not looking for legal advice. > > A family member, “Carl,” has a history of deep financial problems. He says that if he deposits money in a bank, his creditors will seize it. He’s working to dig himself out, but you know how that goes. > > His mother, “Jan,” opened a bank account on which Carl has power of attorney. Carl uses this as his primary account. Jan does not use the account at all. > > Is Jan doing anything illegal? Is she opening herself to financial liability? They live in NY if that has any bearing. He’s setting up jail time for himself and an investigation into his mothers assets. Since he does this already it’s to late to keep his mother’s assets from being looked into. He does dig himself into a dipper hole the longer he does this. I have to wonder how long until he starts in on his mother’s assets. Won’t she be suprised, when she finds she’s broke. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [February 25, 2006, 2:27pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/3 "2006-02-25T14:27:08Z")
> [@Harmonious Discord](#): > > He’s setting up jail time for himself and an investigation into his mothers assets. Since he does this already it’s to late to keep his mother’s assets from being looked into. He does dig himself into a dipper hole the longer he does this. I have to wonder how long until he starts in on his mother’s assets. Won’t she be suprised, when she finds she’s broke. HD, Why do you believe that any of his mother’s assets are in this account? Also, can I get a cite for how he is setting himself up for jail time? Name the law in question. By the way, if I were Carl I would consider pre-paid VISA/MC gift cards or Traveller’s Cheques. Carl should probably talk to an attorney in Collections/Bankruptcy practice to see where he can stick assets (legally) to make them as tricky as humanly possible to seize. ---
**Author:** ![askeptic](https://avatars.discourse-cdn.com/v4/letter/a/eb9ed0/32.png) [@askeptic](https://boards.straightdope.com/u/askeptic)\ **Post date:** [February 25, 2006, 2:49pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/4 "2006-02-25T14:49:55Z")
> [@Mr. Slant](#): > > HD, > > Why do you believe that any of his mother’s assets are in this account? > Also, can I get a cite for how he is setting himself up for jail time? Name the law in question. > By the way, if I were Carl I would consider pre-paid VISA/MC gift cards or Traveller’s Cheques. Carl should probably talk to an attorney in Collections/Bankruptcy practice to see where he can stick assets (legally) to make them as tricky as humanly possible to seize. Its called fraud. By knowingly helping her son hide assets illegally the mother may be charged with criminal conspiracy. Not to mention the possibility of running afoul of the IRS. If he is not reporting the account as an asset he may be charged with tax evasion. Interesting that your advice rather than suggesting he pay his legally incurred debts, he should try to hide them. thats a recipe for disaster that will lead to never getting out from under his problems. In fact hiding assets is a basis for denial of a petition for bankruptcy (See 11 USC 727 (a)(4)(A). So if he ever decides to avail himself of the protection of bankruptcy laws your advice would preclude him. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 3:26pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/5 "2006-02-25T15:26:48Z")
> [@choosybeggar](#): > > Standard disclaimer: Not looking for legal advice. > > Is Jan doing anything illegal? Is she opening herself to financial liability? They live in NY if that has any bearing. I am not your lawyer, you are not my client, this is not legal advice. Probably nothing “illegal” in her allowing him to use her account. If she is subpoenaed [http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$CVP5224$$@TXCVP0R5224+&LIST=LAW+&BROWSER=55667108+&TOKEN=23882459+&TARGET=VIEW](http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=%24%24CVP5224%24%24@TXCVP0R5224+&LIST=LAW+&BROWSER=55667108+&TOKEN=23882459+&TARGET=VIEW) she’d be committing perjury if she lied about it. If she told the truth, the creditors would get the money. > [@askeptic](#): > > Its called fraud. Which section of the penal code are you referring to? There’s this one: > [@](#): > > § 185.00 Fraud in insolvency. > 1. As used in this section, “administrator” means an assignee or > trustee for the benefit of creditors, a liquidator, a receiver or any > other person entitled to administer property for the benefit of > creditors. > 2. A person is guilty of fraud in insolvency when, with intent to > defraud any creditor and knowing that proceedings have been or are about > to be instituted for the appointment of an administrator, or knowing > that a composition agreement or other arrangement for the benefit of > creditors has been or is about to be made, he > (a) conveys, transfers, removes, conceals, destroys, encumbers or > otherwise disposes of any part of or any interest in the debtor’s > estate; or > (b) obtains any substantial part of or interest in the debtor’s > estate; or > (c) presents to any creditor or to the administrator any writing or > record relating to the debtor’s estate knowing the same to contain a > false material statement; or > (d) misrepresents or fails or refuses to disclose to the administrator > the existence, amount or location of any part of or any interest in the > debtor’s estate, or any other information which he is legally required > to furnish to such administrator. > Fraud in insolvency is a class A misdemeanor. [http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$PEN185.00$$@TXPEN0185.00+&LIST=LAW+&BROWSER=31296879+&TOKEN=01588110+&TARGET=VIEW](http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=%24%24PEN185.00%24%24@TXPEN0185.00+&LIST=LAW+&BROWSER=31296879+&TOKEN=01588110+&TARGET=VIEW) But to violate that statute, she’d have to know “that proceedings have been or are aboutto be instituted for the appointment of an administrator,” or “that a composition agreement or other arrangement for the benefit of creditors has been or is about to be made.” That’s certainly not in the OP or **Mr. Slant’s** advice. Were you thinking of another one? And 11 USC § 727(a)(4) reads: > [@](#): > > (a) The court shall grant the debtor a discharge, unless— > > * * * > > (4) the debtor knowingly and fraudulently, **in or in connection with the case** — > **(A) made a false oath or account;** > (B) presented or used a false claim; > (C) gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property, or advantage, for acting or forbearing to act; or > (D) withheld from an officer of the estate entitled to possession under this title, any recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs; (Emphasis added). > **[11 U.S. Code § 727 - Discharge](https://www.law.cornell.edu/uscode/text/11/727)** So the only way the debtor would be refused discharge based on that provision is if in the bankruptcy case, or in connection with it, he lied under oath or gave a false accounting. I don’t see **Mr. Slant** advising him to do any of that. OTOH, if he failed to list the account on his schedules or lied about them under oath at his meeting of creditors, he could be denied discharge. > [@Mr. Slant](#): > > Carl should probably talk to an attorney Yes. ---
**Author:** ![askeptic](https://avatars.discourse-cdn.com/v4/letter/a/eb9ed0/32.png) [@askeptic](https://boards.straightdope.com/u/askeptic)\ **Post date:** [February 25, 2006, 3:38pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/6 "2006-02-25T15:38:57Z")
OK Gfactor, this is off the top of my head, but what about the fact that creditors would not be able to seize the assets in question without a judgement. If they do have a judgement then would not hiding the assets be in violation of that judgement? ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 3:41pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/7 "2006-02-25T15:41:04Z")
BTW, suppose Carl and and Jan claim that he “gave” the money to her. If the gift happened after he was sued or became insolvent, it would probably be a fraudulent conveyance. [http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$DCD273$$@TXDCD0273+&LIST=SEA3+&BROWSER=38426363+&TOKEN=53900595+&TARGET=VIEW](http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=%24%24DCD273%24%24@TXDCD0273+&LIST=SEA3+&BROWSER=38426363+&TOKEN=53900595+&TARGET=VIEW) Carl’s creditors could have the conveyance set aside. [http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$DCD278$$@TXDCD0278+&LIST=SEA3+&BROWSER=13353914+&TOKEN=53900595+&TARGET=VIEW](http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=%24%24DCD278%24%24@TXDCD0278+&LIST=SEA3+&BROWSER=13353914+&TOKEN=53900595+&TARGET=VIEW) ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 3:52pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/8 "2006-02-25T15:52:23Z")
> [@askeptic](#): > > If they do have a judgement then would not hiding the assets be in violation of that judgement? 1. Money judgments aren’t violated, the creditor needs to execute them. Most states give creditors broad powers to search for and seize assets, including the power to set aside fraudulent conveyances, as indicated above. > [@](#): > > what about the fact that creditors would not be able to seize the assets in question without a judgement. 1. Most creditors (except child support, tax, and student loan authorities) have to get a judgment before they can seize assets. But even creditors without judgments are not without remedies: > [@](#): > > § 279. Rights of creditors whose claims have not matured. Where a > conveyance made or obligation incurred is fraudulent as to a creditor > whose claim has not matured he may proceed in a court of competent > jurisdiction against any person against whom he could have proceeded had > his claim matured, and the court may, > a. Restrain the defendant from disposing of his property. > b. Appoint a receiver to take charge of the property, > c. Set aside the conveyance or annul the obligation, or > d. Make any order which the circumstances of the case may require. [http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$DCD279$$@TXDCD0279+&LIST=SEA3+&BROWSER=07633677+&TOKEN=53900595+&TARGET=VIEW](http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=%24%24DCD279%24%24@TXDCD0279+&LIST=SEA3+&BROWSER=07633677+&TOKEN=53900595+&TARGET=VIEW) > [@](#): > > § 6201. Grounds for attachment. An order of attachment may be granted > in any action, except a matrimonial action, where the plaintiff has > demanded and would be entitled, in whole or in part, or in the > alternative, to a money judgment against one or more defendants, when: > 1. the defendant is a nondomiciliary residing without the state, or is > a foreign corporation not qualified to do business in the state; or > 2. the defendant resides or is domiciled in the state and cannot be > personally served despite diligent efforts to do so; or > \*\* 3. the defendant, with intent to defraud his creditors or frustrate > the enforcement of a judgment that might be rendered in plaintiff’s > favor, has assigned, disposed of, encumbered or secreted property, or > removed it from the state or is about to do any of these acts;\*\* or > 4. the action is brought by the victim or the representative of the > victim of a crime, as defined in subdivision six of section six hundred > twenty-one of the executive law, against the person or the legal > representative or assignee of the person convicted of committing such > crime and seeks to recover damages sustained as a result of such crime > pursuant to section six hundred thirty-two-a of the executive law; or > 5. the cause of action is based on a judgment, decree or order of a > court of the United States or of any other court which is entitled to > full faith and credit in this state, or on a judgment which qualifies > for recognition under the provisions of article 53. (Emphasis added).[http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$CVP6201$$@TXCVP06201+&LIST=LAW+&BROWSER=20293760+&TOKEN=07276611+&TARGET=VIEW](http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=%24%24CVP6201%24%24@TXCVP06201+&LIST=LAW+&BROWSER=20293760+&TOKEN=07276611+&TARGET=VIEW) ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 4:02pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/9 "2006-02-25T16:02:08Z")
Of course, prejudgment attachment is subject to constitutional limits: > **[FindLaw's United States Supreme Court case and opinions.](https://caselaw.findlaw.com/us-supreme-court/425/73.html)** > > FindLaw's searchable database of United States Supreme Court decisions since > **[FindLaw's United States Supreme Court case and opinions.](https://caselaw.findlaw.com/us-supreme-court/395/337.html)** > > FindLaw's searchable database of United States Supreme Court decisions since > **[FindLaw's United States Supreme Court case and opinions.](https://caselaw.findlaw.com/us-supreme-court/407/67.html)** > > FindLaw's searchable database of United States Supreme Court decisions since ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 4:05pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/10 "2006-02-25T16:05:22Z")
A thread that discusses some related issues: [Suing Yourself and Garnishing Wages to Frustrate Creditors](http://boards.straightdope.com/sdmb/showthread.php?t=331461) ---
**Author:** ![choosybeggar](https://avatars.discourse-cdn.com/v4/letter/c/8c91f0/32.png) [@choosybeggar](https://boards.straightdope.com/u/choosybeggar)\ **Post date:** [February 25, 2006, 4:10pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/11 "2006-02-25T16:10:20Z")
Thanks for the replies. My take is that as long as Jan doesn’t lie under oath regarding the nature of this arrangement, she’s in the clear. Additionally, Carl risks only losing these assets assuming he doesn’t try to hide them if court proceedings are initiated. So how protected from discovery by creditors is the arrangement the Jan and Carl have? Would pre-pais visa/MC gift cards or travellers cheques be substantially better? Also, sure Carl should consult a lawyer but how are payment arrangements made when one is flat broke? ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 4:22pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/12 "2006-02-25T16:22:55Z")
> [@choosybeggar](#): > > So how protected from discovery by creditors is the arrangement the Jan and Carl have? Would pre-pais visa/MC gift cards or travellers cheques be substantially better? A good collection lawyer will ask about all of that stuff. So Carl would have to commit perjury to hide them. Perjury is illegal. > [@](#): > > Also, sure Carl should consult a lawyer but how are payment arrangements made when one is flat broke? A relative could spring for a short consultation. Or Carl could call [Legal Aid](http://www.legal-aid.org/DocumentIndex.htm?docid=99&catid=14) . Or there are [books](http://books.google.com/books?q=asset+protection+books&oi=print). But most legal asset protection methods will be useless against existing creditors. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [February 26, 2006, 8:53pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/13 "2006-02-26T20:53:59Z")
For clarity here, I NEVER suggested lying. The law prohibits you from perjuring yourself when asked a question in court. Likewise it prohibits you from lying on a bankruptcy petition. It DOES NOT require you to make it easy for your creditors to seize your assets. If a court orders you to disclose your assets, DO SO. There is no debtors’ prison but there sure as Og is a “lied to the judge” prison. If your creditor asks outside of certain legal contexts, nothing compels you to answer. If your assets are meager enough, the resources your creditors will devote to collecting from you are limited. I’m sure Carl is just using his mom as a way to avoid carrying unsafe sums of cash on his person. Carl should certainly pay my next car insurance bill, but if he keeps it in a bank account he might have it seized and wind up unemployed due to lapsed insurance coverage. This serves no one’s interests; not those of Carl, Carl’s creditors or society. Carl probably shouldn’t make a habit of carrying ALL of his money on his person at all times, as that is unsafe. Don’t take my posts as a suggestion that you not pay your creditors. If you can pay them, DO SO. If you have to choose between having a job, living in a place with running water and electricity VS paying your creditors, choose not to pay them now. This post verged on off-topic for GQ, but I felt that at least one poster developed a view of what I posted earlier that doesn’t reflect my intent, my ethics or my opinions. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 26, 2006, 8:58pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/14 "2006-02-26T20:58:04Z")
> [@Mr. Slant](#): > > For clarity here, I NEVER suggested lying. > The law prohibits you from perjuring yourself when asked a question in court. > Likewise it prohibits you from lying on a bankruptcy petition. > It DOES NOT require you to make it easy for your creditors to seize your assets. > If a court orders you to disclose your assets, DO SO. There is no debtors’ prison but there sure as Og is a “lied to the judge” prison. > If your creditor asks outside of certain legal contexts, nothing compels you to answer. > If your assets are meager enough, the resources your creditors will devote to collecting from you are limited. > I’m sure Carl is just using his mom as a way to avoid carrying unsafe sums of cash on his person. Carl should certainly pay my next car insurance bill, but if he keeps it in a bank account he might have it seized and wind up unemployed due to lapsed insurance coverage. This serves no one’s interests; not those of Carl, Carl’s creditors or society. Carl probably shouldn’t make a habit of carrying ALL of his money on his person at all times, as that is unsafe. > Don’t take my posts as a suggestion that you not pay your creditors. If you can pay them, DO SO. If you have to choose between having a job, living in a place with running water and electricity VS paying your creditors, choose not to pay them now. > This post verged on off-topic for GQ, but I felt that at least one poster developed a view of what I posted earlier that doesn’t reflect my intent, my ethics or my opinions. Right on. 😃 ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [February 27, 2006, 3:17pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/15 "2006-02-27T15:17:08Z")
Oh, and, uh… I meant to say Carl should pay HIS next car insurance bill. Not my next car insurance bill. Although if Carl hits the lottery, I’d like him to pay off all his creditors, and maybe for my advice in this board he could pay for a nice dinner for me and my wife. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [February 27, 2006, 4:17pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/16 "2006-02-27T16:17:04Z")
> [@askeptic](#): > > . . .the possibility of running afoul of the IRS. If he is not reporting the account as an asset he may be charged with tax evasion. Just a note on this tangent, the IRS is not interested in assets, they are interested in income. If the bank account pays interest then “Jan” will receive a 1099-INT and will be required to pay taxes on it. The IRS doesn’t know or care about “Carl” w.r.t. this account and he is not evading taxes since the account is not in his name. If “Jan” wants to give “Carl” the interest that she earns on the account, it is irrelevant to the IRS (unless it is more than $10,000 in a year, but it doesn’t sound like that comes into play in this situation). As long as “Jan” is paying the taxes there is no evasion. A lawyer would have to comment on the personal liability of an attorney-in-fact to pay taxes on income from such an account, but I think the answer is none as long as the registered owner is paying them. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 27, 2006, 4:29pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/17 "2006-02-27T16:29:03Z")
> [@CookingWithGas](#): > > Just a note on this tangent, the IRS is not interested in assets, they are interested in income. If the bank account pays interest then “Jan” will receive a 1099-INT and will be required to pay taxes on it. The IRS doesn’t know or care about “Carl” w.r.t. this account and he is not evading taxes since the account is not in his name. If “Jan” wants to give “Carl” the interest that she earns on the account, it is irrelevant to the IRS (unless it is more than $10,000 in a year, but it doesn’t sound like that comes into play in this situation). As long as “Jan” is paying the taxes there is no evasion. > > A lawyer would have to comment on the personal liability of an attorney-in-fact to pay taxes on income from such an account, but I think the answer is none as long as the registered owner is paying them. Actually the payment of taxes would probably have to be reported as income by Carl. [Can someone else pay your taxes?](http://www.slate.com/id/2134674/?nav=tap3) The reality is: the interest is Carl’s income. As the Slate article points out, no law says you have to pay your own taxes, but you run into an infinite regress. No matter how many times Jan pays the taxes on the payment of the taxes for the the payment of the taxes, the event itself will generate income to Carl, which will (theoretically) be taxable. I’d bet that at some point, the income would become too small to matter. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [February 27, 2006, 5:44pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/18 "2006-02-27T17:44:34Z")
> [@CookingWithGas](#): > > Just a note on this tangent, the IRS is not interested in assets, they are interested in income As long as “Jan” is paying the taxes there is no evasion. Not true. Hiding assets for the IRS can be a crime also. If for example you filed for an “Offer in Compromise” and you had assets hidden like that, it certainly could be a crime. IRS Revenue Officers can & do turn dudes over to Criminal Investigation if it appears that someone who owes the IRS does have the assets to pay but is attempting to hide those assets in such a manner. In this case, for example, if “CarL” does this, and the IRS finds out, they can also sieze just about all of “Jan’s” liquid assets too. IANAL. But there is nothing for Jan to gain, and a lot to lose. If he needs to hide his assets, he should buy travelers checks or money orders, or just hide the cash under the mattress. However, if he does so, for gawdssakes, he’d better not lie about them. Another thing Carl could be doing is hiding assets in order to file bankruptcy or apply for Assistance. In these cases, Carl is likely commiting a crime, and his mother may also be doing so. YMMV. ---
**Author:** ![whole\_bean](https://avatars.discourse-cdn.com/v4/letter/w/96bed5/32.png) [@whole\_bean](https://boards.straightdope.com/u/whole_bean)\ **Post date:** [February 27, 2006, 6:52pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/19 "2006-02-27T18:52:17Z")
> [@choosybeggar](#): > > Thanks for the replies. My take is that as long as Jan doesn’t lie under oath regarding the nature of this arrangement, she’s in the clear. Additionally, Carl risks only losing these assets assuming he doesn’t try to hide them if court proceedings are initiated. > > So how protected from discovery by creditors is the arrangement the Jan and Carl have? Would pre-pais visa/MC gift cards or travellers cheques be substantially better? > > Also, sure Carl should consult a lawyer but how are payment arrangements made when one is flat broke? Wrong. Jan is opening herself up to exposure as the transferee of a fraudulent transfer – from what you’ve written, I think it’s pretty clear that these are fraudulent transfers. What does this mean? It means Jan could be sued at a later date for the money she received. Carl is in a lot of financial trouble. He needs to quit trying to play a shell game with his creditors and talk to a bankruptcy lawyer. He might have discharge issues as well depending on when the transfers take place in relation to his petition date. I don’t think Carl is in any criminal trouble, though I am not familiar with the New York penal code, for the fraudfulent transfers to Jan. The mention of perjury presumes that a deposition or some other oath or affirmation has taken place. That fact was not given in the OP though. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 27, 2006, 7:56pm UTC](https://boards.straightdope.com/t/is-helping-a-relative-hide-their-assets-in-this-manner-illegal/346042/20 "2006-02-27T19:56:04Z")
> [@whole bean](#): > > Jan is opening herself up to exposure as the transferee of a fraudulent transfer – from what you’ve written, I think it’s pretty clear that these are fraudulent transfers. What does this mean? It means Jan could be sued at a later date for the money she received. New York still calls 'em fraudulent conveyances, as I pointed out in post #7. Under the Uniform Fraudulent Conveyance Act, the transferee’s “exposure” is nil, they just have to give the stuff back. [http://www.3dca.flcourts.org/3d02-2105.pdf](http://www.3dca.flcourts.org/3d02-2105.pdf) (pdf) As I understand the OP, Jan isn’t willing to lie for Carl, so it probably would not even come to litigation. OTOH, Jan might lose some time responding to lawyers for the various creditors. Here is a copy of the Uniform Fraudulent Conveyance Act (Wyoming’s, since the New York site appears to be down right now): > [@](#): > > CHAPTER 14 > FRAUDULENT CONVEYANCES > 34‑14‑101. Short title. > > This act [§§ 34‑14‑101 through 34‑14‑113] may be cited as the Uniform Fraudulent Conveyance Act. > > 34‑14‑102. Definitions. > (a) In this act [§§ 34‑14‑101 through 34‑14‑113]: > > (i) “Assets” of a debtor means property not exempt from liability for his debts. To the extent that any property is liable for any debts of the debtor, such property shall be included in his assets; > (ii) “Conveyance” includes every payment of money, assignment, release, transfer, lease, mortgage or pledge of tangible or intangible property, and also the creation of any lien or incumbrance; > (iii) “Creditor” is a person having any claim, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent; > (iv) “Debt” includes any legal liability, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent. > > 34‑14‑103. Determination of insolvency. > (a) A person is insolvent when the present fair salable value of his assets is less than the amount that will be required to pay his probable liability on his existing debts as they become absolute and matured. > (b) In determining whether a partnership is insolvent there shall be added to the partnership property the present fair salable value of the separate assets of each general partner in excess of the amount probably sufficient to meet the claims of his separate creditors, and also the amount of any unpaid subscription to the partnership of each limited partner, provided the present fair salable value of the assets of such limited partner is probably sufficient to pay his debts, including such unpaid subscription. > > 34‑14‑104. Fair consideration. > (a) Fair consideration is given for property, or obligation: > > (i) When in exchange for such property, or obligation, as a fair equivalent therefor, and in good faith, property is conveyed or an antecedent debt is satisfied; or > (ii) When such property, or obligation is received in good faith to secure a present advance or antecedent debt in amount not disproportionately small as compared with the value of the property, or obligation obtained. > > 34‑14‑105. Conveyances by insolvents. > Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent is fraudulent as to creditors without regard to his actual intent if the conveyance is made or the obligation is incurred without a fair consideration. > > 34‑14‑106. Conveyances by persons in business. > Every conveyance made without fair consideration when the person making it is engaged or is about to engage in a business or transaction for which the property remaining in his hands after the conveyance is an unreasonably small capital, is fraudulent as to creditors and as to other persons who become creditors during the continuance of such business or transaction without regard to his actual intent. > 34‑14‑107. Conveyances by person about to incur debts. > Every conveyance made and every obligation incurred without fair consideration when the person making the conveyance or entering into the obligation intends or believes that he will incur debts beyond his ability to pay as they mature, is fraudulent as to both present and future creditors. > 34‑14‑108. Conveyances made with intent to defraud. > Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay, or defraud either present or future creditors, is fraudulent as to both present and future creditors. > 34‑14‑109. Conveyance of partnership property. > (a) Every conveyance of partnership property and every partnership obligation incurred when the partnership is or will be thereby rendered insolvent, is fraudulent as to partnership creditors, if the conveyance is made or obligation is incurred: > (i) To a partner, whether with or without a promise by him to pay partnership debts; or > (ii) To a person not a partner without fair consideration to the partnership as distinguished from consideration to the individual partners. > > 34‑14‑110. Creditor’s rights; claims matured. > > (a) Where a conveyance or obligation is fraudulent as to a creditor, such creditor, when his claim has matured, may, as against any person except a purchaser for fair consideration without knowledge of the fraud at the time of the purchase, or one who has derived title immediately or mediately from such a purchaser: > (i) Have the conveyance set aside or obligation annulled to the extent necessary to satisfy his claim; or > (ii) Disregard the conveyance and attach or levy execution upon the property conveyed. > > (b) A purchaser who without actual fraudulent intent has given less than a fair consideration for the conveyance or obligation, may retain the property or obligation as security for repayment. > > 34‑14‑111. Creditor’s rights; claims not matured. > > (a) Where a conveyance made or obligation incurred is fraudulent as to a creditor whose claim has not matured he may proceed in a court of competent jurisdiction against any person against whom he could have proceeded had his claim matured, and the court may: > > (i) Restrain the defendant from disposing of his property; > (ii) Appoint a receiver to take charge of the property; > (iii) Set aside the conveyance or annul the obligation; or > (iv) Make any order which the circumstances of the case may require. > > 34‑14‑112. Cases not provided for. > In any case not provided for in this act [§§ 34‑14‑101 through 34‑14‑113] the rules of law and equity including the law merchant, and in particular the rules relating to the law of principal and agent, and the effect of fraud, misrepresentation, duress or coercion, mistake, bankruptcy or other invalidating cause shall govern. > > 34‑14‑113. Construction. > This act [§§ 34‑14‑101 through 34‑14‑113] shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it. [http://legisweb.state.wy.us/statutes/titles/title34/chapter14.htm](http://legisweb.state.wy.us/statutes/titles/title34/chapter14.htm) Again, though, since Jan isn’t claiming an interest in the money, a judgment creditor could reach the money by garnishing, which would be cheaper and faster. Fraudulent conveyance would really only come into play if Jan claims that the money belongs to her. > [@](#): > > He might have discharge issues as well depending on when the transfers take place in relation to his petition date. How so? > [@](#): > > He needs to quit trying to play a shell game with his creditors and talk to a bankruptcy lawyer. Sage advice. I am not your lawyer. I am not a licensed attorney in New York. You are not my client. 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