English law addressing fraudulent conveyances dates back to the early Middle Ages. The first comprehensive attempt to prohibit such transfers appeared in the Fraudulent Conveyances Act of 1571, known as the “Statute of Elizabeth.” The Act was promulgated by Elizabeth I, daughter of Henry VIII from his second marriage to the ill-fated Anne Boleyn. The statute forbade feigned, covinous and fraudulent transfers of land and personalty entered into with the intent to delay, hinder or defraud creditors and others of their just and lawful claims.
The Statute provided that such conveyances were “clearly and utterly void, frustrate and of no effect” as against “creditors and others” whose claims might be hindered by such conveyances.
Today, as in the Middle Ages, conveyances which defeat claims of existing creditors may be challenged as being fraudulent. Asset protection is the “good witch” of asset transfers, wherein one legitimately arranges one’s assets so as to render them impervious to creditor attack. Asset protection is best implemented before a creditor appears, since a transfer made with the intent to hinder, delay or defraud a creditor may be deemed a fraudulent conveyance subject to rescission. Asset protection in its most elementary form might consist of merely gifting or consuming the asset.