How can I avoid having assets seized to reconcile an insolvent estate?

UPDATED: Oct 2, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 2, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

How can I avoid having assets seized to reconcile an insolvent estate?

My girlfriend’s dad passed away a few weeks ago. He was underwater on his mortgage, owed about 175k and the home is worth about 130k. She and her sister are concerned about losing the only 2 assets in the estate a free and clear car and motorcycle that have sentimental value. What is the best option to avoid these assets being seized by the bank?

Asked on October 22, 2019 under Real Estate Law, Connecticut


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

There is no way to protect them if the bank elects to go after them. The bank is owed money (since the home is underwater); it has the right to seek that money from the estate; since you and the sisters are aware that money is owed, any transactions or transfers made of the car or motorcycle, other than the estate selling them for their fair market value (in which case, the estate then has the cash value of the vehicles to apply to its debts) will be a fraudulent transfer, or a transaction made to hide assets from creditors. Such transfers may be voided or undone, so the creditor can get the asset.
Example: the sisters try to give or title the vehicles to a friend, a significant other, a business they or a friend owns, etc. Unless the person getting the vehicles pays what they are worth, this will be a fraudulent transfer and may be set aside. 
As a general rule, if you already know money is owed, it's too late to protect assets.
Of course, if the vehicles have sentimental value, the sisters can buy them from the estate for their actual, fair market value; that is not fraudulent, and the lender will have recourse to the money the estate was paid.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption