Would I be acting illegaly ifI were to accept a $20,000 gift from a parent who might be sued in the next year?

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Would I be acting illegaly ifI were to accept a $20,000 gift from a parent who might be sued in the next year?

My father is currently accused of copyright infringement by an old business partner. Long story short, the former colleague registered some intellectual material with proper agencies before my father did, however my father continued production of the material through his L.L.C. Charges have yet to be pressed I am 18. My vehicle is currently in his name for insurance reasons but as a result of completely different personal circumstances, we are going to put it in my name. Could I get in trouble for assisting in fraud or money laundering or something like that?

Asked on September 13, 2011 under Bankruptcy Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It depends on the exact circumstances. For example: if your father has sufficient income or assets to pay a judgment against him, even if he transfers assets to you, then there is no problem--he may gift what he likes, to whom he likes, so long as it is not a fraud on creditors. On the other hand, if your father cannot pay any resulting judgment, assuming he is sued and loses, then it's possible that a transfer made to close family member which took away assets that might otherwise be used to meet or pay the judgement could be viewed as a fraud on creditors. If that's the case, there could be some liability, or at a minimum, the transfer could be rescinded.

Also, note that if you are being gifted $20k in assets, you may also have some tax consequences or liability to deal with.


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