Although you are free to do whatever you want with your assets before a lawsuit is filed, certain actions are viewed as fraud. If you hide or conceal your assets after a creditor sues you, your actions may be considered fraudulent. The courts can legally repossess the assets you attempted to cover up. Under the Uniform Fraudulent Transfer Act, it's illegal to defraud creditors.
When you move your assets so creditors can't touch them in the future, it's generally considered estate planning, provided you do it before there's a problem. Safeguarding your assets to protect them from anyone who may sue you one day is completely legal. Irrevocable trusts are commonly used to shield assets from creditors. However, once there's a lawsuit against you, moving around assets is no longer classified as estate planning.
If you are sued, don't move around your assets. Once your assets are at risk, any transfers could be deemed fraudulent conveyance. Your actions may be considered fraudulent if the creditor can prove you transferred assets or sold them for less than the fair market value. The transfer must also leave you insolvent and unable to pay your debt to the creditor. Fraudulent conversions occur when you use non-exempt assets to purchase exempt assets. An example of a fraudulent transfer is wiping out your savings account and using the money to purchase a car or a primary home during a lawsuit. If the creditor can prove you intentionally hid your assets, the court can reverse the transaction or transfer, making it subject to the creditor's collection.