Issue: Whether the Uniform Fraudulent Transfer Act (UFTA) applies to property transferred because of divorce proceedings.
|Area of Law:||Bankruptcy & Creditors Rights, Family Law|
|Keywords:||Uniform Fraudulent Transfer Act (UFTA); Divorce proceedings; Transfer of property|
|Cited Cases:||663 S.E.2d 631; 802 N.W.2d 436; 277 S.E.2d 709; 129 N.W.2d 694; 128 N.W.2d 852|
|Cited Statutes:||N.D. Cent. Code § 13-02.1-01(4), (6); § 13-02.1-01(3); N.D. Cent. Code § 13-02.1-1(12)|
The UFTA defines “creditor” as “a person who has a claim” against the debtor and a “debtor” is “a person who is liable on a claim.” N.D. Cent. Code § 13-02.1-01(4), (6). A “claim” is broadly defined as “the right to payment, whether or not the right is reduced to judgment, liquidated or unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.” Id. § 13-02.1-01(3). A “transfer” is defined as “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease and creation of a lien or other incumbrances.” N.D. Cent. Code § 13-02.1-1(12). A transfer of an interest in real estate qualifies as a “transfer” under the UFTA. E.g., Carlson v. Carlson, 2011 ND 168, 802 N.W.2d 436 (brothers’ farming partnership, which used individually owned land, dissolved; court concluded that one brother’s indirect transfer of land to his wife was not fraudulent as to other brother, because no current “claim” existed at time land was transferred; claim arose later, when brothers sought to dissolve the partnership).
The UFTA clearly applies to divorce proceedings. See Meija v. Reed, 3 Cal. Rptr. 3d 390, 395 (Cal. 2003) (“On its face, the UFTA applies to all transfers. . . . Thus, the UFTA on its face encompasses transfers made under [a Marital Separation Agreement]. Consequently, most decisions of other states construing parallel provisions of the UFTA hold […]