Uniform Fraudulent Transfer Act-extinguishing claims.

Plain English Breakdown

The effectiveness of these changes in preventing fraudulent transfers and protecting creditors remains uncertain.

Uniform Fraudulent Transfer Act - Extinguishing Claims

This law changes time limits for bringing actions against fraudulent transfers and establishes new rules for claims involving certain types of trusts.

What This Bill Does

• Changes the time limit for bringing an action under W.S. 34-14-205(a)(i) from four years to two years after the transfer was made or the obligation incurred, and from one year to six months after the transfer could be reasonably discovered by the claimant.
• Shortens the period for creditors to file a claim under W.S. 34-14-205(a)(ii) or 34-14-206(a) from four years to two years after the transfer was made or the obligation incurred.
• Establishes new rules for claims involving transfers to qualified spendthrift trusts and irrevocable discretionary trusts, requiring notice within 120 days of the transfer.
• Sets different time limits if notice is not provided, allowing creditors more time but requiring clear evidence that a claim was made before the transfer.

Who It Names or Affects

• Creditors who have claims against fraudulent transfers.
• Settlors and trustees involved in qualified spendthrift trusts or irrevocable discretionary trusts.
• Courts handling cases related to fraudulent transfers.

Terms To Know

Fraudulent Transfer

A transfer of assets made with the intent to defraud creditors or without receiving a reasonably equivalent value in exchange.

Qualified Spendthrift Trust

A trust that protects assets from being claimed by creditors and allows for discretionary distributions by the trustee.

Limits and Unknowns

• The law only applies to fraudulent transfers occurring on or after July 1, 2021.
• It does not specify how notice should be given if a creditor is unknown to the settlor.

Official Summary Text

Bill Summary - 21LSO-0373
Bill No.:

HB0064

Effective:

7/1/2021 12:00:00 AM

LSO No.:

21LSO-0373

Enrolled Act No.:

HEA No. 0040

Chapter No.:

50

Prime Sponsor:

Greear

Catch Title:

Uniform Fraudulent Transfer Act-extinguishing claims.

Subject:

Specifying when claims related to fraudulent transfers concerning certain trusts are extinguished.

Summary/Major Elements:

This act amends and specifies when claims for relief with respect to a fraudulent transfer or obligation under the Uniform Fraudulent Transfer Act are extinguished.

The act amends the following time limits for which claims for relief may be brought regarding fraudulent transfers:

For transfers that intend to defraud a creditor, the time limit is changed from four (4) to two (2) years after the transfer was made or the obligation incurred and from one (1) year to six (6) months after the transfer could be reasonably discovered.
For transfers that don't receive a reasonably equivalent value, the time limit is changed from four (4) years to two (2) years after the transfer was made.
For certain transfers made to insiders, the time limit is changed from one (1) year to six (6) months to file a claim.

The act establishes separate extinguishment time periods for claims involving fraudulent transfers to a qualified spendthrift trust or an irrevocable discretionary trust. Under this act, those claims are extinguished unless an action is brought within one hundred twenty (120) days after the date on which notice of the transfer is mailed to a creditor or on which notice is published in a newspaper of general circulation.

If notice is not provided, claims are extinguished within the later of two (2) years after the transfer or six (6) months after the claim is or could be reasonably discovered if the creditor can show by clear-and-convincing evidence that the creditor asserted a specific claim against the settlor before the transfer.
The above summary is not an official publication of the Wyoming Legislature and is not an official statement of legislative intent.

While the Legislative Service Office endeavored to provide accurate information in this summary, it should not be relied upon as a comprehensive abstract of the bill.

Current Bill Text

21LSO-0373

ORIGINAL House

Bill No
.
HB0064

ENROLLED ACT NO. 40,

HOUSE OF REPRESENTATIVES

SIXTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING
2021 General Session

AN ACT relating to the Uniform Fraudulent Transfer Act; specifying when claims related to fraudulent transfers to qualified spendthrift trusts and irrevocable trusts are extinguished; amending time limits for extinguishing other actions involving fraudulent transfers; making conforming amendments and technical corrections; specifying applicability; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 4
‑
10
‑
514 and 34
‑
14
‑
210 are amended to read:

4
‑
10
‑
514.

Action brought pursuant to provisions of Uniform Fraudulent Transfer Act.

Except as provided in W.S. 4
‑
10
‑
518, no action of any kind, including an action to enforce a judgment entered by a court or other body having adjudicative authority, may be brought at law or in equity for an attachment or other provisional remedy against qualified trust property or to set aside a qualified transfer unless the action is brought pursuant to the provisions of the Uniform Fraudulent
Transfers
Transfer
Act.

34
‑
14
‑
210.

Extinguishment of claim for relief.

(a)

Except as provided in subsection (b) of this section, a
claim for relief with respect to a fraudulent transfer or obligation under this act is extinguished unless
an
action is brought:

(i)

Under W.S. 34
‑
14
‑
205(a)(i), within
four (4)
two (2)
years after the transfer was made or the obligation was incurred or, if later, within
one (1) year
six (6)
months
after the transfer or obligation was or could reasonably have been discovered by the claimant;

(ii)

Under W.S.
31
‑
14
‑
205(a)(ii)
34
‑
14
‑
205(a)(ii)
or 34
‑
14
‑
206(a), within
four (4)
two (2)
years after the transfer was made or the obligation was incurred; or

(iii)

Under W.S. 34
‑
14
‑
206(b), within
one (1) year
six (6) months
after the transfer was made or the obligation was incurred.

(b)

A claim for relief with respect to a fraudulent transfer or obligation under this act involving qualified transfers to a qualified spendthrift trust as provided by W.S. 4
‑
10
‑
510 through 4
‑
10
‑
515 or involving transfers to an irrevocable discretionary trust, provided that the trustee may only make discretionary distributions under W.S. 4
‑
10
‑
506(c), is extinguished unless an action is brought:

(i)

With respect to a creditor known to the settlor, one hundred twenty (120) days after the date on which notice of the transfer is mailed to the creditor, provided that the notice states:

(A)

The name and address of the settlor or the settlor's representative and the name and address of the trustee or the trustee's representative;

(B)

That assets were transferred to a qualified spendthrift trust or to an irrevocable trust where the trustee can only make discretionary distributions; and

(C)

That the creditor is required to initiate an action against the settlor and the trustee within one hundred twenty (120) days from the mailing of the notice or the claim is forever barred.

(ii)

With respect to a creditor not known to the settlor, one hundred twenty (120) days after the date on which notice of the transfer is first published in a newspaper of general circulation in the county in which the settlor resides, provided that the notice includes the information required in paragraph (i) of this subsection;

(iii)

Notwithstanding paragraphs (i) and (ii) of this subsection, within the later of two (2) years after the transfer is made or six (6) months after the transfer is or reasonably could have been discovered by the creditor if the creditor can demonstrate by clear and convincing evidence that the creditor asserted a specific claim against the settlor before the transfer.

Section 2.

The provisions of this act shall apply to causes of action involving fraudulent transfers that accrue on or after the effective date of this act.

Section 3
.

This act is effective July 1, 2021
.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the House.

Chief Clerk

1