A fraudulent conveyance (also called a fraudulent transfer) is a transfer of assets made to hinder, delay, or defraud a creditor — for example, moving property to a relative to keep it away from a judgment. In Missouri, this conduct is governed by the state's version of the Uniform Fraudulent Transfer Act, and a creditor harmed by such a transfer can ask a court to undo it.
How a fraudulent conveyance works in Missouri
Missouri's Uniform Fraudulent Transfer Act is found at RSMo § 428.005 through 428.059. It recognizes two ways a transfer can be attacked. The first is actual fraud — a transfer made with actual intent to hinder, delay, or defraud a creditor. Because debtors rarely admit that intent, Missouri courts allow it to be inferred from circumstantial signs known as "badges of fraud," such as a transfer to a relative or insider, the debtor keeping control of the property, concealment, transferring nearly all assets, receiving too little in return, or moving assets right before or after a lawsuit.
The second is constructive fraud, which requires no proof of intent at all. A transfer is constructively fraudulent when the debtor receives less than reasonably equivalent value while insolvent — meaning the debtor could not pay debts as they came due. Giving away or underselling property in that condition can be undone even if no one set out to cheat anyone.
Why it matters
For a creditor trying to collect, a fraudulent-transfer claim is a way to claw back value that should have been available to pay a legitimate debt. A court can void the transfer so the asset is again within reach, or enter a money judgment against the person who received it for the asset's value.
For someone receiving a transfer, the risk runs the other way. Property handed over by a debtor facing collection can be pulled back into the creditor's reach, and an insider who knew of the debtor's troubles is an easy target. A buyer who paid fair value in good faith, however, generally has a defense and may keep the asset.
Frequently Asked Questions
Does a creditor have to prove the debtor intended to cheat them?
Not always. Under the actual-fraud theory, intent must be shown, though it can be proven through badges of fraud. Under the constructive-fraud theory, no intent is required — only that the debtor received less than reasonably equivalent value while insolvent.
What can a court do about a fraudulent conveyance?
A Missouri court can void (set aside) the transfer so the creditor can reach the asset, or enter a money judgment against the transferee for the asset's value, up to the amount needed to satisfy the claim.
Can the person who received the property be sued?
Yes. A fraudulent-transfer action typically names both the debtor who made the transfer and the transferee who received it. A transferee who took the property in good faith and gave reasonably equivalent value generally has a defense.
Legal Disclaimer
This page provides general legal information about Missouri law and is not legal advice. It does not create an attorney-client relationship. Every situation depends on its own facts, deadlines, and documents; consult a qualified Missouri attorney before acting.