3

Is it legal for a preparing-to-file-for-divorce billionaire to donate all his money into a foreign charity, give up his current citizenship and then become a high official of said foreign charity if the billionaire doesn't want to give part of his net worth to his wife?

Note: The foreign charity's CEO is the billionaire's father.

  • 1
    What is the significance of the Chinese Red Cross? This question sounds too specific. For example, would you expect the same answer if you replaced "Chinese red cross" with "foreign company?" Also what does "ready to divorced" mean? Preparing to file for divorce, or already in the process? Sounds like a translation failure. – feetwet Sep 8 '15 at 22:36
  • OK, looking better, but since when do charities have "stockholders?" And "the stockholder" -- do you mean sole owner? Do you mean any foreign company, as opposed to a non-profit business? – feetwet Sep 8 '15 at 22:42
  • @feetwet High official... – Victor Sep 8 '15 at 22:49
  • I recently settled a similar case. About 85% of the marital assets (including most of the about half the estate which had supposedly been transferred) went to the wife once the truth came out. – ohwilleke Nov 19 '16 at 16:45
8

Short Answer

It depends on the totality of the facts and circumstances.

But based on your description, this approach is likely problematic and might not withstand judicial scrutiny.

Explanation

  • Plaintiffs can attack this behavior as a sham transaction.
  • Court could find this to be a fraudulent conveyance.
  • and provide relief via clawback order.

Badges of Fraud include: (Source: Wikipedia)

  • Becoming insolvent because of the transfer;
  • Lack or inadequacy of consideration;
  • Family, or insider relationship among parties;
  • The retention of possession, benefits or use of property in question;
  • The existence of the threat of litigation;
  • The financial situation of the debtor at the time of transfer or after transfer;
  • The existence or a cumulative effect of a series of transactions after the onset of debtor’s financial difficulties;
  • The general chronology of events;
  • The secrecy of the transaction in question; and
  • Deviation from the usual method or course of business.
  • 1
    If the money was donated to a foreign charity, which court will have jurisdiction to order them to return the money? How would such an order be enforced? – Nate Eldredge Oct 31 '15 at 4:28
1

In the US anyway, there is a duty of transparency, and there is a duty to refrain from hypothecation.

However, divorces involving billionaires generally follow their own trajectory apart and away from those of the madding crowd. Does a billionaire not have access to legal resources?

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.