Q: Legal risk of transferring funds to reduce liquid assets in car accident settlement negotiation?

A: That is considered fraud and can be set aside in the event of a judgment against you. Your insurance company has a duty to resolve claims against you within the policy limit. You have no obligation to reveal your assets until a judgment is entered against you. Whether it is a good idea to do so depends on many factors that are beyond the scope of this Q & A forum.

A: Transferring significant funds to your spouse right before disclosing assets carries serious legal risks. This kind of transfer might be viewed by the court as an attempt to conceal or misrepresent your financial situation. If the court determines you've intentionally hidden or reduced assets to avoid paying a settlement, it could result in penalties, fines, or even sanctions for fraud.

Courts typically require transparency and honesty during settlement negotiations, especially when a declaration of assets is involved. Any last-minute financial moves can appear suspicious and might undermine your credibility. Such actions can negatively impact your position in negotiations, weakening your ability to achieve a favorable resolution.

Before making any financial decisions, wait until your insurance-appointed attorney provides you with guidance. They can advise you on legally appropriate strategies to protect your assets. Acting cautiously now can help you avoid complicating the settlement process or facing more severe legal consequences down the road.