Legal Question in Business Law in California

Re: Lien

California law is about the same as AZ law as described by Mr. Hudspeth. A transfer of property for less than fair value is a fraudulent transfer if the purpose OR the effect is to impede a creditor, current OR likely in the future, from collecting a debt.

Unsophisticated debtors often get the bright idea of transferring (usually as a gift, or for $1) their house or boat to their brother-in-law, their LLC, or an offshore trust, thinking that if the property has a different owner it cannot be levied upon. This is incorrect. The creditor can have the transfer set aside, and both the transferor and the transferee will be liable for damages in addition to the original debt.

The Uniform Fraudulent Transfer Act has been adopted with minor variations from state to state by more than 40 U.S. states, and where not adopted, the states punish such transfers under common-law principles. The California version of the UFTA is codified in the Civil Code as sections 3439 et seq.

Re: Lien

I am an Arizona attorney. Generally,any transfer of property after you have knowledge or notice of a claim is a fraudulent transfer (arguably to LLC is no different than to sister if made to escape lien.) The transfer is called a "badge of fraud" that goes back centuries. Damages and attorneys fees for fraudulent transfer may be greater than original claim. Suggest you get CA counsel to advise on CA law. Good luck.