The Continuing Concealment Doctrine applies when someone appears to have transferred an asset, but retained secret control or a beneficial interest. It commonly applies where someone convenys a house to another, but continues to live there, pay the mortgage and utilities, maintain and improve the property, and so forth. It can apply to stocks or a bank account, if the dividends or interest are still paid to the former owner who also retains control over future transfers of the fund.
Despite any state’s statute of limitations, a bankruptcy trustee can recover a fraudulently transferred asset from the transferee if the concealment continued into the limitations period. A bankruptcy discharge can be denied if the concealment continued into the year before the bankruptcy was filed.
Dry reading, huh? Way too many times, a client comes sees me after having acted as their own attorney (having a fool for a client!) and made these kinds of transfers. Unscrambing the omelette (mixed metaphor, sorry) can be difficult and require an extensive waiting period.
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Last modified: February 9, 2013