When will a divorce court or a taxing authority set aside a fraudulent property transfer

Transfers During Periods of Martial Difficulty
A transfer of property solely by one spouse during a period of marital difficulty, whether or not divorce is on the horizon, might be held to have not been made unconditionally by the non-donor spouse and result in a reimbursement requirement to the non-donor spouse being imposed on the donor spouse.
In the majority of states, the non-donor spouse may have legally set aside a gratuitous transfer of property made during a period of marital strife as a deemed fraudulent transfer.
H was audited in March and April of 1981 over suspected unreported income related to illegal drug trafficking. H and W fast tracked a divorce in July of 1981. H was not present but filed an answer and a waiver and a division of property was not requested as the parties had not reached a settlement agreement at that point. The presiding family law judge was not informed that a property settlement was pending. The Judge warned W that she could not seek any type of support from H and dissolved the marriage.
In August of 1981, H transferred his ownership of real property to W’s daughter and the conveyance read: Conveyance pursuant to property settlement agreement and dissolution of marriage.
In September of 1981 H transferred to W various assets that he owned without consideration. Immediately following these transfers H was insolvent.
In 1985, H was indicted for tax fraud and incarcerated for 18 months.
In 1990, the IRS made a jeopardy assessment against W as transferee of assets from H via a Statutory Notice of Deficiency to which W filed a tax court petition.
5. Citing Phillips v. Commissioner, 283 U.S. 589, 592, 593 n. 3 [ 9 AFTR 1467] (1931) the court held that pursuant to section 6901(a)(1)(A), the IRS may collect from a transferee of assets (W) the unpaid income tax liability of the transferor (H).
Case law has defined a transferee as an individual who takes or receives property of another “without full, fair and adequate consideration to the prejudice of creditors” United States v. Floersch, 276 F.2d 714, 717 [5 AFTR2d 1229] (10th Cir. 1960).
Where the IRS meets its burden of proof, the transferee (W) is liable for the transferor’s (H’s) taxes owed up and until the transfer, as well as any additions to tax, penalties and interest, limited to the value of the assets transferred.
IRS must rely on state law to make a determination as to the transferee’s liability for the transferor’s obligation.
Under Florida case law, gifts and transfers made for the purpose or intent to delay, hinder, or defraud creditors is void, Schad v. Commissioner, 87 T.C. 609, 614 (1986).
Florida fraudulent conveyances case law list the following badges of fraud:
a. The existence or threat of litigation
b. A familial relationship between the transferor and transferee
c. Grossly inadequate, or complete lack of consideration
d. Secrecy and concealment of the transfer
Florida fraudulent conveyances case law list the following badges of fraud:
d. Secrecy and concealment of the transfer
e. Retention of rights of possession of the property by the transferor
f. The insolvency or indebtedness of the transferor at the time of the transfer
g. The transfer of all or substantially all of the debtor’s estate

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