In an effort to protect their assets from the claims of creditors and lawsuits, many people give those assets away, usually to other family members or friends. It is not against the law to do this to protect yourself from people who may have a claim against you in the future, but it is illegal to do so to shelter your assets from present and past creditors or other people who may already have a claim against you (for example, someone with whom you have had an automobile accident). Such a gift is called a fraudulent transfer.
In a famous divorce case, Yacobian v. Yacobian, a woman accused her husband of fraudulently giving away substantial amounts of his assets to his children from a prior marriage eight years before their separation to prevent her from having those assets considered for division in their divorce. The court denied her claim, saying that because the gift was made so long before their divorce, it constituted appropriate gift giving. However, the court did say that if gifts had been made at a time when a divorce was imminent, such gifts might qualify as fraudulent transfers.