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Simple English definitions for legal terms
simulated transaction
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A quick definition of simulated transaction:
A simulated transaction is when someone pretends to sell something, but no money or ownership actually changes hands. This is usually done to try and hide the property from creditors. It's like playing pretend, but with real things.A more thorough explanation:
A simulated transaction is a type of sale in which no price or other consideration is paid or intended to be paid, and in which there is no intent to actually transfer ownership. This type of sale is usually done in an attempt to put property beyond the reach of creditors.
For example, if a person owes a large amount of money to creditors, they may try to sell their property to a friend or family member for a very low price, but with the understanding that they will continue to use and control the property as if they still owned it. This is a simulated transaction because there is no real transfer of ownership, and the seller is trying to hide their assets from their creditors.
Simulated transactions are illegal and can be challenged in court by creditors or other interested parties.