I have a joint online bank account with my adult son. We both live in California. If he gets into a situation where he might get sued, I will withdraw all of the money and move it into an account in my name only. My three questions are, is this money now protected from the lawsuit if:
(1) I withdraw it after the "event" but before he is actually sued,
(2) I withdraw it after he is sued, but before the suit is settled,
(3) I withdraw it after the suit is settled.
They can levy any accounts with your son's name on it. It will then be for you to file a claim with the court and try to get them to release the funds to you. It is certainly easier to remove yourself from any joint accounts so you do not get hurt.
I would definitely try to get off any joint accounts with your son as soon as possible. Money that is withdrawn can possibly be traced as being a "potentially" fraudulent transfer to avoid a creditor under the Uniform Fraudulent Transfers Act. However, it is a pain in the rear send for a creditor to pursue that path and all of the legal maneuvers that such requires, unless it is a large debt.
If you suspect that your son has creditors and that this account will be levied sot he creditor can collect, which is a good thing to assume, the sooner you get your money out of the joint the account the better, so as to avoid any fraudulent transfer act claims. YTou can't expect creditors to know which money is yours and which is his, so they assume it's all his if they're trying to collect a judgment.
Creditors can't levy any money until they get a judgment, so if your son hasn't even been sued yet, there's no chance of a levy. but once a lawsuit is filed, things can move fast, and you have no way of knowing if a suit will settle or not.
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The critical question here is whose money is it? If it is your son's money and you are hiding it for him you may get entangled in a "fraudulent transfer" situation as described by the other lawyers.
If it is truly your money, my advice would be to close the account and open a new account in your name only as soon as possible. The longer you wait, the more it looks like a fraudulent transfer.
IMPORTANT NOTE: This response was prepared by Adina T. Stern, A Professional Law Corporation for informational purposes only and is not intended as legal advice. The information available in this answer is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The information on legal issues available here is not a substitute for legal advice from an attorney who is familiar with all of the facts surrounding your particular situation who is licensed in the appropriate jurisdiction. This answer does not create an attorney-client relationship.
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