I wonder if someone with some legal training can speak to Gregjrichards question about the transferring of assets? If a spouse transfers assets, are these assets protected or does the unity of the marriage relationship mean the spouse is also liable for the cost if the civil suit is successful?
I do not have any formal legal training.
That aside, transferring of assets to avoid a court ordered debt resolution is known as 'fraudulent transfer'. These transfers can be voided by the court and the property given to the creditor. But..... the property must be located and the court informed about it. Locating it can be difficult.
As for spousal liability for civil suits, it would depend on the state where the civil suit was placed. Then, it can get very fuzzy....
Most states are not common property states. These states would appear to give broad, or perhaps even very broad protection to a spouse's separate assets, especially in what is called "tort debt (law suit related debt) verse contractual debt from purchases.
But.... even common property states can make a distinction between tort and contractual debt regarding spousal obligations. For example, Texas defines itself as a 'common property' state- but then adds alot of fine print into that definition to the extent that it can be more like a hybrid common / separate property state in some regards.
Then, one needs to factor in what a state's exempt property is. I believe most, if not all states, have forms of exempt property that cannot be seized pursuant to a lawsuit. Say, a 'homestead' residence of a certain value, cars under a certain value, trade tools etc.
But... state law on exempt property can range from very token exemptions to
very numerous exemptions with broad definitions regarding 'exempt' that can make actually collecting any lawsuit awards
de facto impossible in many cases, even with a court order.
In short, the answers to your questions are very exact (sarcasm):
- Fraudulent transfers can be voided- well,
if the transfer can be identified and
if the property can be located. Courts do not assist in locating property for seizure.
- Spouses might be responsible for tort debt in some states- but...absolutely not in others and 'most likely not' in still others.
