¶ 701
Overview
Scope of the chapter. A creditor may avoid a transfer on two grounds: actual intent to hinder, delay or defraud, or constructive fraud, which requires no intent. This chapter analyzes both grounds under the Uniform Voidable Transactions Act, the meaning of solvency, the remedies available to a successful creditor, the defenses and liabilities of transferees, the criminal statutes that apply to the same conduct, and the conduct of voidable-transfer litigation. Chapter 6 traced the history and structure of the law (see supra ch. 6). Citations in this chapter are to the Uniform Voidable Transactions Act (Unif. L. Comm'n 2014) unless otherwise noted. The UFTA provisions in force in many states are numbered identically for the provisions discussed here, except where noted.
The planner's use of this chapter. For the planner, this chapter is a design manual read in reverse. Each element a creditor must prove is a fact the planner can influence before the transfer: whether the client is solvent, whether value is given, whether the client retains control, whether the transfer is disclosed, whether a claim is in view. The planning file assembled under the protocol in chapter 3 is the evidence that answers each element (see supra ¶ 350.02). The chapter therefore pairs each rule with the planning response that addresses it.
How to read the chapter. Paragraph 710 analyzes actual intent and the badges of fraud. Paragraph 720 analyzes the constructive-fraud grounds and the concept of reasonably equivalent value. Paragraph 730 explains the solvency tests and the solvency affidavit. Paragraph 740 sets out the creditor's remedies, and ¶ 750 the position of transferees, including trustees and beneficiaries. Paragraph 760 addresses criminal exposure, and ¶ 770 the conduct and resolution of voidable-transfer litigation.