Question 1

Can I form an LLC after I've been sued to protect my assets?

Accepted Answer

Almost certainly not. Fraudulent transfer law (UFTA/UVTA) prohibits transferring assets to hinder, delay, or defraud creditors — including potential creditors whose claims haven't been filed yet. If you transfer assets to an LLC after receiving a legal threat, those transfers can be reversed by a court and the LLC can be treated as non-existent for judgment enforcement purposes. Forming an entity now, after a claim, does not protect assets that exist today.

Question 2

Is there anything I can actually do right now?

Accepted Answer

Some things remain legitimate after a claim arises: paying ordinary business expenses and trade creditors in the normal course, making arm's-length sales of assets for fair market value, continuing to operate the business normally. What you cannot do: give assets away, transfer them below market value, move them to related parties, or restructure specifically to defeat the claim. An asset protection attorney reviews your specific situation to identify what's still available — this is not a general answer.

Question 3

What is fraudulent transfer and why does it matter?

Accepted Answer

Fraudulent transfer (now called fraudulent conveyance or voidable transaction under modern law) is a legal doctrine that allows courts to reverse asset transfers made with the intent to hinder, defraud, or delay creditors. 'Constructive fraud' doesn't even require intent — if you transfer assets for less than fair market value while a claim exists, the transfer can be voided regardless of what you intended. The look-back period is typically 4–7 years. Courts are specifically trained to identify last-minute restructuring.

Question 4

What if the lawsuit is frivolous or unlikely to succeed?

Accepted Answer

Irrelevant to fraudulent transfer analysis. If a claim exists — even a frivolous one — you're a debtor for purposes of the UFTA from the moment it's filed. Transfers made after that point are evaluated for fraudulent intent. Don't assume you can restructure now and defend the claim simultaneously — those are separate legal battles, and losing the fraudulent transfer fight is often worse than losing the underlying claim.

Question 5

I haven't been sued yet, but I'm worried it's coming. What can I do?

Accepted Answer

This is the most important question. If a claim has not been filed and you have not received a formal legal threat (demand letter, notice of claim), you are still in a position where protective transfers may be legitimate — depending on the circumstances and state law. This is the window where proper asset protection planning is still possible. The time to call an attorney is not after the lawsuit lands. It's now.

Question 6

Should I contact you or an attorney?

Accepted Answer

An attorney first. We are not attorneys. We can form entities, provide educational content, and refer you to qualified asset protection counsel — but we cannot provide legal advice in a lawsuit context. For an active legal matter, you need an attorney with a bar license and malpractice coverage before you take any action. We can make that referral within 24 hours if you contact us directly.

You just received a legal threat.Do not transfer any assets yet.

What you can and cannot do after a claim arises

What we can do for you right now

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Emergency asset protection — common questions

If you haven't been sued yet, protect yourself now.