1     
UNIFORM VOIDABLE TRANSACTIONS ACT

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Lyle W. Hillyard

5     
House Sponsor: V. Lowry Snow

6     

7     LONG TITLE
8     General Description:
9          This bill renames, recodifies, and amends the Uniform Fraudulent Transfer Act and
10     related provisions.
11     Highlighted Provisions:
12          This bill:
13          ▸     changes the name of the Uniform Fraudulent Transfer Act to the Uniform Voidable
14     Transactions Act;
15          ▸     makes changes consistent with the 2014 version of the Uniform Fraudulent Transfer
16     Act;
17          ▸     modifies and defines terms;
18          ▸     modifies provisions relating to the determination of insolvency;
19          ▸     enacts provisions relating to the burden of proof;
20          ▸     modifies provisions relating to the transfer and recovery of assets;
21          ▸     enacts a governing law provision;
22          ▸     addresses the bill's applicability to a series organization;
23          ▸     enacts transitional language;
24          ▸     addresses the applicability of the Relation to Electronic Signatures in Global and
25     National Commerce Act; and
26          ▸     makes technical and conforming changes.
27     Money Appropriated in this Bill:
28          None

29     Other Special Clauses:
30          None
31     Utah Code Sections Affected:
32     AMENDS:
33          7-2-12, as last amended by Laws of Utah 2014, Chapter 189
34          31A-27a-507, as enacted by Laws of Utah 2007, Chapter 309
35          70A-2-402, as enacted by Laws of Utah 1965, Chapter 154
36          70A-2a-308, as enacted by Laws of Utah 1990, Chapter 197
37          75-2-205, as last amended by Laws of Utah 2003, Second Special Session, Chapter 3
38          75-7-105, as enacted by Laws of Utah 2004, Chapter 89
39          75-7-107, as renumbered and amended by Laws of Utah 2004, Chapter 89
40          75-7-301, as repealed and reenacted by Laws of Utah 2004, Chapter 89
41          75-7-501, as repealed and reenacted by Laws of Utah 2004, Chapter 89
42          75-7-505, as enacted by Laws of Utah 2004, Chapter 89
43          75-7-816, as enacted by Laws of Utah 2004, Chapter 89
44          78B-2-302, as last amended by Laws of Utah 2016, Chapter 388
45          78B-2-307, as renumbered and amended by Laws of Utah 2008, Chapter 3
46     ENACTS:
47          25-6-201, Utah Code Annotated 1953
48          25-6-301, Utah Code Annotated 1953
49          25-6-401, Utah Code Annotated 1953
50          25-6-402, Utah Code Annotated 1953
51          25-6-403, Utah Code Annotated 1953
52          25-6-407, Utah Code Annotated 1953
53          25-6-501, Utah Code Annotated 1953
54     RENUMBERS AND AMENDS:
55          25-6-101, (Renumbered from 25-6-1, as enacted by Laws of Utah 1988, Chapter 59)

56          25-6-102, (Renumbered from 25-6-2, as last amended by Laws of Utah 1992, Chapter
57     168)
58          25-6-103, (Renumbered from 25-6-3, as enacted by Laws of Utah 1988, Chapter 59)
59          25-6-104, (Renumbered from 25-6-4, as enacted by Laws of Utah 1988, Chapter 59)
60          25-6-202, (Renumbered from 25-6-5, as enacted by Laws of Utah 1988, Chapter 59)
61          25-6-203, (Renumbered from 25-6-6, as last amended by Laws of Utah 1989, Chapter
62     61)
63          25-6-302, (Renumbered from 25-6-7, as enacted by Laws of Utah 1988, Chapter 59)
64          25-6-303, (Renumbered from 25-6-8, as enacted by Laws of Utah 1988, Chapter 59)
65          25-6-304, (Renumbered from 25-6-9, as last amended by Laws of Utah 2015, Chapter
66     459)
67          25-6-305, (Renumbered from 25-6-10, as enacted by Laws of Utah 1988, Chapter 59)
68          25-6-404, (Renumbered from 25-6-11, as enacted by Laws of Utah 1988, Chapter 59)
69          25-6-405, (Renumbered from 25-6-12, as enacted by Laws of Utah 1988, Chapter 59)
70          25-6-406, (Renumbered from 25-6-13, as enacted by Laws of Utah 1988, Chapter 59)
71          25-6-502, (Renumbered from 25-6-14, as repealed and reenacted by Laws of Utah
72     2013, Chapter 284)
73     

74     Be it enacted by the Legislature of the state of Utah:
75          Section 1. Section 7-2-12 is amended to read:
76          7-2-12. Powers of commissioner in possession -- Sale of assets -- Postpossession
77     financing -- New deposit instruments -- Executory contracts -- Transfer of property --
78     Avoidance of transfers -- Avoidable preferences -- Setoff.
79          (1) Upon taking possession of the institution, the commissioner may do all things
80     necessary to preserve its assets and business, and shall rehabilitate, reorganize, or liquidate the
81     affairs of the institution in a manner he determines to be in the best interests of the institution's
82     depositors and creditors. Any such determination by the commissioner may not be overruled

83     by a reviewing court unless it is found to be arbitrary, capricious, fraudulent, or contrary to law.
84     In the event of a liquidation, he shall collect all debts due and claims belonging to it, and may
85     compromise all bad or doubtful debts. He may sell, upon terms he may determine, any or all of
86     the property of the institution for cash or other consideration. The commissioner shall give
87     such notice as the court may direct to the institution of the time and place of hearing upon an
88     application to the court for approval of the sale. The commissioner shall execute and deliver to
89     the purchaser of any property of the institution sold by him those deeds or instruments
90     necessary to evidence the passing of title.
91          (2) With approval of the court and upon terms and with priority determined by the
92     court, the commissioner may borrow money and issue evidence of indebtedness. To secure
93     repayment of the indebtedness, he may mortgage, pledge, transfer in trust, or hypothecate any
94     or all of the property of the institution superior to any charge on the property for expenses of
95     the proceeding as provided in Section 7-2-14. These loans may be obtained for the purpose of
96     facilitating liquidation, protecting or preserving the assets in the charge of the commissioner,
97     expediting the making of distributions to depositors and other claimants, aiding in the
98     reopening or reorganization of the institution or its merger or consolidation with another
99     institution, or the sale of all of its assets. Neither the commissioner nor any special deputy or
100     other person lawfully in charge of the affairs of the institution is under any personal obligation
101     to repay those loans. The commissioner may take any action necessary or proper to
102     consummate the loan and to provide for its repayment and to give bond when required for the
103     faithful performance of all undertakings in connection with it. The commissioner or special
104     deputy shall make application to the court for approval of any loan proposed under this section.
105     Notice of hearing upon the application shall be given as the court directs. At the hearing upon
106     the application any stockholder or shareholder of the institution or any depositor or other
107     creditor of the institution may appear and be heard on the application. Prior to the obtaining of
108     a court order, the commissioner or special deputy in charge of the affairs of the institution may
109     make application or negotiate for the loan or loans subject to the obtaining of the court order.

110          (3) With the approval of the court pursuant to a plan of reorganization or liquidation
111     under Section 7-2-18, the commissioner may provide for depositors to receive new deposit
112     instruments from a depository institution that purchases or receives some or all of the assets of
113     the institution in the possession of the commissioner. All new deposit instruments issued by
114     the acquiring depository institution may, in accordance with the terms of the plan of
115     reorganization or liquidation, be subject to different amounts, terms, and interest rates than the
116     original deposit instruments of the institution in the possession of the commissioner. All
117     deposit instruments issued by the acquiring institution shall be considered new deposit
118     obligations of the acquiring institution. The original deposit instruments issued by the
119     institution in the possession of the commissioner are not liabilities of the acquiring institution,
120     unless assumed by the acquiring institution. Unpaid claims of depositors against the institution
121     in the possession of the commissioner continue, and may be provided for in the plan of
122     reorganization or liquidation.
123          (4) The commissioner, after taking possession of any institution or other person subject
124     to the jurisdiction of the department, may terminate any executory contract, including standby
125     letters of credit, unexpired leases and unexpired employment contracts, to which the institution
126     or other person is a party. If the termination of an executory contract or unexpired lease
127     constitutes a breach of the contract or lease, the date of the breach is the date on which the
128     commissioner took possession of the institution. Claims for damages for breach of an
129     executory contract shall be filed within 30 days of receipt of notice of the termination, and if
130     allowed, shall be paid in the same manner as all other allowable claims of the same priority out
131     of the assets of the institution available to pay claims.
132          (5) With approval of the court and upon a showing by the commissioner that it is in the
133     best interests of the depositors and creditors, the commissioner may transfer property on
134     account of an indebtedness incurred by the institution prior to the date of the taking.
135          (6) (a) The commissioner may avoid any transfer of any interest of the institution in
136     property or any obligation incurred by the institution that is void or voidable by a creditor under

137     Title 25, Chapter 6, Uniform [Fraudulent Transfer] Voidable Transactions Act.
138          (b) The commissioner may avoid any transfer of any interest in real property of the
139     institution that is void as against or voidable by a subsequent purchaser in good faith and for a
140     valuable consideration of the same real property or any portion thereof who has duly recorded
141     his conveyance at the time possession of the institution is taken, whether or not such a
142     purchaser exists.
143          (c) The commissioner may avoid any transfer of any interest in property of the
144     institution or any obligation incurred by the institution that is invalid or void as against, or is
145     voidable by a creditor that extends credit to the institution at the time possession of the
146     institution is taken by the commissioner, and that obtains, at such time and with respect to such
147     credit, a judgment lien or a lien by attachment, levy, execution, garnishment, or other judicial
148     lien on the property involved, whether or not such a creditor exists.
149          (d) The right of the commissioner under Subsections (6)(b) and (c) to avoid any
150     transfer of any interest in property of the institution shall be unaffected by and without regard
151     to any knowledge of the commissioner or of any creditor of the institution.
152          (e) "Transfer" means every mode, direct or indirect, absolute or conditional, voluntary
153     or involuntary, or disposing of or parting with property or with an interest in property,
154     including retention of title as a security interest.
155          (f) The commissioner may avoid and recover any payment or other transfer of any
156     interest in property of the institution to or for the benefit of a creditor, for or on account of an
157     antecedent debt owed by the institution before the transfer was made if the creditor at the time
158     of such transfer had reasonable cause to believe that the institution was insolvent, and if the
159     payment or other transfer will allow the creditor to obtain a greater percentage of his debt than
160     he would be entitled to under the provisions of Section 7-2-15. For the purposes of this
161     subsection:
162          (i) antecedent debt does not include earned wages and salaries and other operating
163     expenses incurred and paid in the normal course of business;

164          (ii) a transfer of any interest in real property is deemed to have been made or suffered
165     when it became so far perfected that a subsequent good faith purchaser of the property from the
166     institution for a valuable consideration could not acquire an interest superior to the transferee;
167     and
168          (iii) a transfer of property other than real property is deemed to have been made or
169     suffered when it became so far perfected that a creditor on a simple contract could not acquire a
170     lien by attachment, levy, execution, garnishment, or other judicial lien superior to the interest
171     of the transferee.
172          (g) For purposes of this section, "date of possession" means the earlier of the date the
173     commissioner takes possession of a financial institution under Title 7, Chapter 2, Possession of
174     Depository Institution by Commissioner, or the date when the commissioner enters an order
175     suspending payments to depositors and other creditors under Section 7-2-19.
176          (7) (a) With or without the prior approval of the court, the commissioner or any federal
177     deposit insurance agency appointed by him as receiver or liquidator of a depository institution
178     closed by the commissioner under the provisions of this chapter may setoff against the deposits
179     or other liabilities of the institution any debts or other obligations of the depositor or claimant
180     due and owing to the institution. The amount of any setoff against the liabilities of the
181     institution shall be no greater than the amount the depositor or claimant would receive pursuant
182     to Section 7-2-15 after final liquidation of the institution. When the liquidation value of a
183     depositor's or claimant's claim against the institution will or may be less than the full amount of
184     the claim, setoff may be made prior to final liquidation if the commissioner or any receiver or
185     liquidator appointed by him can reasonably estimate the liquidation value of the claim, and the
186     court, after notice and opportunity for hearing, approves the estimate for purposes of making
187     the setoff. If the right of setoff is exercised, the commissioner or any receiver or liquidator
188     appointed by him shall give written notice to the depositor or claimant of the amount setoff.
189          (b) The existence and amount of a debtor or creditor relationship or both, between the
190     institution and its depositor or claimant and the right to the proceeds in a deposit account shall

191     be determined solely by the books and records of the institution.
192          (c) Any contract purporting to affect the right of setoff shall be in writing and signed by
193     the depositor-debtor and an authorized officer of the institution and be maintained as a part of
194     the records of the institution.
195          (d) Any claim that a deposit account is a special account not subject to setoff because it
196     was maintained for a specific purpose or to satisfy a particular obligation other than satisfaction
197     of or as security for an indebtedness to the institution or that the right to the deposit actually
198     belongs to a third party does not affect the right to setoff of the commissioner or any receiver or
199     liquidator appointed by him unless the special nature of the account is clearly shown in the
200     books and records of the institution.
201          (e) In the absence of any other instrument in writing, the terms and provisions of the
202     signature card applicable to a particular account in effect at the time the commissioner takes
203     possession of the institution shall be determinative of the right of setoff by the commissioner or
204     any receiver or liquidator appointed by him.
205          (f) Knowledge of the institution or of any director, officer, or employee of the
206     institution that the nature of the account is other than as shown in the books and records of the
207     institution does not affect the right of setoff by the commissioner or any receiver or liquidator
208     appointed by him.
209          (g) The liability of the commissioner or any receiver or liquidator appointed by him for
210     exercising a right of setoff other than as authorized by this section shall be only to a person
211     who establishes by the procedure set forth in Section 7-2-6 that his interest in the account is
212     superior to that of the person whose debt to the institution was setoff against the account. The
213     amount of any such liability shall be no greater than the amount of the setoff and neither the
214     commissioner or any receiver or liquidator appointed by him shall be liable for any action taken
215     under this section unless the action taken is determined by the court to be arbitrary or
216     capricious.
217          Section 2. Section 25-6-101, which is renumbered from Section 25-6-1 is renumbered

218     and amended to read:
219     
CHAPTER 6. UNIFORM VOIDABLE TRANSACTIONS ACT

220     
Part 1. General Provisions

221          [25-6-1].      25-6-101. Title.
222          (1) This chapter is known as the "Uniform [Fraudulent Transfer] Voidable
223     Transactions Act."
224          (2) This part is known as "General Provisions."
225          Section 3. Section 25-6-102, which is renumbered from Section 25-6-2 is renumbered
226     and amended to read:
227          [25-6-2].      25-6-102. Definitions.
228          [In] As used in this chapter:
229          (1) "Affiliate" means:
230          (a) a person [who] that directly or indirectly owns, controls, or holds with power to
231     vote, 20% or more of the outstanding voting securities of the debtor, other than a person [who]
232     that holds the securities:
233          (i) as a fiduciary or agent without sole discretionary power to vote the securities; or
234          (ii) solely to secure a debt, if the person has not exercised the power to vote;
235          (b) a corporation 20% or more of whose outstanding voting securities are directly or
236     indirectly owned, controlled, or held with power to vote, by the debtor or a person [who] that
237     directly or indirectly owns, controls, or holds, with power to vote, 20% or more of the
238     outstanding voting securities of the debtor, other than a person [who] that holds the securities:
239          (i) as a fiduciary or agent without sole discretionary power to vote the securities; or
240          (ii) solely to secure a debt, if the person has not exercised the power to vote;
241          (c) a person whose business is operated by the debtor under a lease or other agreement,
242     or a person substantially all of whose assets are controlled by the debtor; or
243          (d) a person [who] that operates the debtor's business under a lease or other agreement
244     or controls substantially all of the debtor's assets.

245          (2) "Asset" means property of a debtor, but does not include:
246          (a) property to the extent it is encumbered by a valid lien;
247          (b) property to the extent it is generally exempt under nonbankruptcy law; or
248          (c) an interest in property held in tenancy by the entireties to the extent it is not subject
249     to process by a creditor holding a claim against only one tenant.
250          (3) "Claim," except as used in "claim for relief," means a right to payment, whether or
251     not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
252     unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
253          (4) "Creditor" means a person [who] that has a claim.
254          (5) "Debt" means liability on a claim.
255          (6) "Debtor" means a person [who] that is liable on a claim.
256          (7) "Electronic" means relating to technology having electrical, digital, magnetic,
257     wireless, optical, electromagnetic, or similar capabilities.
258          [(7)] (8) "Insider" includes:
259          (a) if the debtor is an individual:
260          (i) a relative of the debtor or of a general partner of the debtor;
261          (ii) a partnership in which the debtor is a general partner;
262          (iii) a general partner in a partnership described in Subsection [(7)] (8)(a)(ii);
263          (iv) a corporation of which the debtor is a director, officer, or person in control; or
264          (v) a limited liability company of which the debtor is a member or manager;
265          (b) if the debtor is a corporation:
266          (i) a director of the debtor;
267          (ii) an officer of the debtor;
268          (iii) a person in control of the debtor;
269          (iv) a partnership in which the debtor is a general partner;
270          (v) a general partner in a partnership described in Subsection [(7)] (8)(b)(iv);
271          (vi) a limited liability company of which the debtor is a member or manager; or

272          (vii) a relative of a general partner, director, officer, or person in control of the debtor;
273          (c) if the debtor is a partnership:
274          (i) a general partner in the debtor;
275          (ii) a relative of a general partner in, a general partner of, or a person in control of the
276     debtor;
277          (iii) another partnership in which the debtor is a general partner;
278          (iv) a general partner in a partnership described in Subsection [(7)] (8)(c)(iii);
279          (v) a limited liability company of which the debtor is a member or manager; or
280          (vi) a person in control of the debtor;
281          (d) if the debtor is a limited liability company:
282          (i) a member or manager of the debtor;
283          (ii) another limited liability company in which the debtor is a member or manager;
284          (iii) a partnership in which the debtor is a general partner;
285          (iv) a general partner in a partnership described in Subsection [(7)] (8)(d)(iii);
286          (v) a person in control of the debtor; or
287          (vi) a relative of a general partner, member, manager, or person in control of the
288     debtor;
289          (e) an affiliate, or an insider of an affiliate as if the affiliate were the debtor; and
290          (f) a managing agent of the debtor.
291          [(8)] (9) "Lien" means a charge against or an interest in property to secure payment of a
292     debt or performance of an obligation, and includes a security interest created by agreement, a
293     judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a
294     statutory lien.
295          (10) "Organization" means a person other than an individual.
296          [(9)] (11) "Person" means an individual, estate, partnership, limited liability company,
297     [corporation,] association, [organization,] trust, business or nonprofit entity, public corporation,
298     government or governmental subdivision [or], agency, [business trust, estate, trust, or any]

299     instrumentality, or other legal or commercial entity.
300          [(10)] (12) "Property" means anything that may be the subject of ownership.
301          (13) "Record" means information that is inscribed on a tangible medium or that is
302     stored in an electronic or other medium that is retrievable in perceivable form.
303          [(11)] (14) "Relative" means an individual [or an individual related to a spouse,]
304     related by consanguinity within the third degree as determined by the common law, [or] a
305     spouse, or an individual related to a spouse within the third degree as so determined, and
306     includes an individual in an adoptive relationship within the third degree.
307          (15) "Sign" means, with present intent to authenticate or adopt a record:
308          (a) to execute or adopt a tangible symbol; or
309          (b) to attach to or logically associate with the record an electronic symbol, sound, or
310     process.
311          [(12)] (16) "Transfer" means every mode, direct or indirect, absolute or conditional, or
312     voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and
313     includes payment of money, release, lease, and creation of a lien or other encumbrance.
314          [(13)] (17) "Valid lien" means a lien that is effective against the holder of a judicial
315     lien subsequently obtained by legal or equitable process or proceedings.
316          Section 4. Section 25-6-103, which is renumbered from Section 25-6-3 is renumbered
317     and amended to read:
318          [25-6-3].      25-6-103. Insolvency.
319          (1) A debtor is insolvent if, at fair valuation, the sum of the debtor's debts is greater
320     than all of the debtor's assets [at a fair valuation].
321          (2) (a) A debtor [who] that is generally not paying [his] the debtor's debts as they
322     become due other than as a result of a bona fide dispute is presumed to be insolvent.
323          (b) The presumption imposes on the party against which the presumption is directed
324     the burden of proving that the nonexistence of insolvency is more probable than its existence.
325          [(3) A partnership is insolvent under Subsection (1) if the sum of the partnership's

326     debts is greater than the aggregate, at a fair valuation, of all of the partnership's assets and the
327     sum of the excess of the value of each general partner's nonpartnership assets over the partner's
328     nonpartnership debts.]
329          [(4)] (3) Assets under this section do not include property that has been transferred,
330     concealed, or removed with intent to hinder, delay, or defraud creditors or that has been
331     transferred in a manner making the transfer voidable under this chapter.
332          [(5)] (4) Debts under this section do not include an obligation to the extent it is secured
333     by a valid lien on property of the debtor not included as an asset.
334          Section 5. Section 25-6-104, which is renumbered from Section 25-6-4 is renumbered
335     and amended to read:
336          [25-6-4].      25-6-104. Value -- Transfer.
337          (1) Value is given for a transfer or an obligation if, in exchange for the transfer or
338     obligation, property is transferred or an antecedent debt is secured or satisfied. However, value
339     does not include an unperformed promise made other than in the ordinary course of the
340     promisor's business to furnish support to the debtor or another person.
341          (2) Under Subsection [25-6-5] 25-6-202(1)(b) and Section [25-6-6] 25-6-203, a person
342     gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset
343     pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale
344     for the acquisition or disposition of the interest of the debtor upon default under a mortgage,
345     deed of trust, or security agreement.
346          (3) A transfer is made for present value if the exchange between the debtor and the
347     transferee is intended by them to be contemporaneous and is [in fact] substantially
348     contemporaneous.
349          Section 6. Section 25-6-201 is enacted to read:
350     
Part 2. Voidable Transfer or Obligation

351          25-6-201. Title.
352          This part is known as "Voidable Transfer or Obligation."

353          Section 7. Section 25-6-202, which is renumbered from Section 25-6-5 is renumbered
354     and amended to read:
355          [25-6-5].      25-6-202. Voidable transfer or obligation -- Present or future
356     creditor -- Determination of intent -- Burden of proof.
357          (1) A transfer made or obligation incurred by a debtor is [fraudulent] voidable as to a
358     creditor, whether the creditor's claim arose before or after the transfer was made or the
359     obligation was incurred, if the debtor made the transfer or incurred the obligation:
360          (a) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
361          (b) without receiving a reasonably equivalent value in exchange for the transfer or
362     obligation[;], and the debtor:
363          (i) was engaged or was about to engage in a business or a transaction for which the
364     remaining assets of the debtor were unreasonably small in relation to the business or
365     transaction; or
366          (ii) intended to incur, or believed or reasonably should have believed that [he] the
367     debtor would incur, debts beyond [his] the debtor's ability to pay as they became due.
368          (2) To determine "actual intent" under Subsection (1)(a), consideration may be given,
369     among other factors, to whether:
370          (a) the transfer or obligation was to an insider;
371          (b) the debtor retained possession or control of the property transferred after the
372     transfer;
373          (c) the transfer or obligation was disclosed or concealed;
374          (d) before the transfer was made or obligation was incurred, the debtor had been sued
375     or threatened with suit;
376          (e) the transfer was of substantially all the debtor's assets;
377          (f) the debtor absconded;
378          (g) the debtor removed or concealed assets;
379          (h) the value of the consideration received by the debtor was reasonably equivalent to

380     the value of the asset transferred or the amount of the obligation incurred;
381          (i) the debtor was insolvent or became insolvent shortly after the transfer was made or
382     the obligation was incurred;
383          (j) the transfer occurred shortly before or shortly after a substantial debt was incurred;
384     and
385          (k) the debtor transferred the essential assets of the business to a lienor [who] that
386     transferred the assets to an insider of the debtor.
387          (3) A creditor making a claim for relief under Subsection (1) has the burden of proving
388     the elements of the claim for relief by a preponderance of the evidence.
389          Section 8. Section 25-6-203, which is renumbered from Section 25-6-6 is renumbered
390     and amended to read:
391          [25-6-6].      25-6-203. Transfer or obligation voidable -- Present creditor --
392     Burden of proof.
393          (1) A transfer made or obligation incurred by a debtor is [fraudulent] voidable as to a
394     creditor whose claim arose before the transfer was made or the obligation was incurred if:
395          (a) the debtor made the transfer or incurred the obligation without receiving a
396     reasonably equivalent value in exchange for the transfer or obligation; and
397          (b) the debtor was insolvent at the time or became insolvent as a result of the transfer
398     or obligation.
399          (2) A transfer made by a debtor is [fraudulent] voidable as to a creditor whose claim
400     arose before the transfer was made if the transfer was made to an insider for an antecedent debt,
401     the debtor was insolvent at the time, and the insider had reasonable cause to believe that the
402     debtor was insolvent.
403          (3) Subject to Subsection 25-6-103(2), a creditor making a claim for relief under
404     Subsection (1) or (2) has the burden of proving the elements of the claim for relief by a
405     preponderance of the evidence.
406          Section 9. Section 25-6-301 is enacted to read:

407     
Part 3. Transfers and Remedies

408          25-6-301. Title.
409          This part is known as "Transfers and Remedies."
410          Section 10. Section 25-6-302, which is renumbered from Section 25-6-7 is renumbered
411     and amended to read:
412          [25-6-7].      25-6-302. Transfer -- When made.
413          In this chapter:
414          (1) [A] a transfer is made:
415          (a) with respect to an asset that is real property other than a fixture, but including the
416     interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so
417     far perfected that a good faith purchaser of the asset from the debtor against [whom] which
418     applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is
419     superior to the interest of the transferee; and
420          (b) with respect to an asset that is not real property or that is a fixture, when the
421     transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien
422     other than under this chapter that is superior to the interest of the transferee[.];
423          (2) [If] if applicable law permits the transfer to be perfected as provided in Subsection
424     (1) and the transfer is not so perfected before the commencement of an action for relief under
425     this chapter, the transfer is deemed made immediately before the commencement of the
426     action[.];
427          (3) [If] if applicable law does not permit the transfer to be perfected as provided in
428     Subsection (1), the transfer is made when it becomes effective between the debtor and the
429     transferee[.];
430          (4) [A] a transfer is not made until the debtor has acquired rights in the asset
431     transferred[.]; and
432          (5) [An] an obligation is incurred:
433          (a) if oral, when it becomes effective between the parties; or

434          (b) if evidenced by a [writing] record, when the [writing executed] record signed by the
435     obligor is delivered to or for the benefit of the obligee.
436          Section 11. Section 25-6-303, which is renumbered from Section 25-6-8 is renumbered
437     and amended to read:
438          [25-6-8].      25-6-303. Remedies of creditors.
439          (1) In an action for relief against a transfer or obligation under this chapter, a creditor,
440     subject to the limitations in Section [25-6-9] 25-6-304, may obtain:
441          (a) avoidance of the transfer or obligation to the extent necessary to satisfy the
442     creditor's claim;
443          (b) an attachment or other provisional remedy against the asset transferred or other
444     property of the transferee [in accordance with the procedure prescribed by the Utah Rules of
445     Civil Procedure] if available under applicable law;
446          (c) subject to applicable principles of equity and in accordance with applicable rules of
447     civil procedure:
448          (i) an injunction against further disposition by the debtor or a transferee, or both, of the
449     asset transferred or of other property;
450          (ii) appointment of a receiver to take charge of the asset transferred or of other property
451     of the transferee; or
452          (iii) any other relief the circumstances may require.
453          (2) If a creditor has obtained a judgment on a claim against the debtor, the creditor, if
454     the court orders, may levy execution on the asset transferred or its proceeds.
455          Section 12. Section 25-6-304, which is renumbered from Section 25-6-9 is renumbered
456     and amended to read:
457          [25-6-9].      25-6-304. Good faith transfer.
458          (1) Except as otherwise provided in this section, a transfer or obligation is not voidable
459     under Subsection [25-6-5] 25-6-202(1)(a) against a person [who] that took in good faith and for
460     a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.

461          (2) Except as otherwise provided in this section, to the extent a transfer is [voidable]
462     avoidable in an action by a creditor under Subsection [25-6-8] 25-6-303(1)(a), the following
463     rules apply:
464          (a) the creditor may recover judgment for the value of the asset transferred, as adjusted
465     under Subsection (3), or the amount necessary to satisfy the creditor's claim, whichever is
466     less[.]; and
467          (b) the judgment may be entered against:
468          [(a)] (i) the first transferee of the asset or the person for whose benefit the transfer was
469     made; or
470          [(b) any subsequent transferee other than]
471          (ii) an immediate or mediate transferee of the first transferee, other than:
472          (A) a good faith transferee [who] that took for value; or [from any subsequent
473     transferee.]
474          (B) an immediate or mediate good faith transferee of a person described in Subsection
475     (2)(a)(ii)(A); and
476          (c) recovery under Subsection 25-6-303(1)(a) or (2) of or from the asset transferred or
477     its proceeds, by levy or otherwise, is available only against a person described in Subsection
478     (2)(b)(i) or (ii).
479          (3) If the judgment under Subsection (2) is based upon the value of the asset
480     transferred, the judgment shall be for an amount equal to the value of the asset at the time of
481     the transfer, subject to an adjustment as equities may require.
482          (4) Except as otherwise provided in this section, notwithstanding the voidability of a
483     transfer or an obligation under this chapter, a [good-faith] good faith transferee or obligee is
484     entitled, to the extent of the value given the debtor for the transfer or obligation, to:
485          (a) a lien on or a right to retain [any] an interest in the asset transferred;
486          (b) enforcement of [any] an obligation incurred; or
487          (c) a reduction in the amount of the liability on the judgment.

488          (5) A transfer is not voidable under Subsection [25-6-5] 25-6-202(1)(b) or Section
489     [25-6-6] 25-6-203 if the transfer results from:
490          (a) termination of a lease upon default by the debtor when the termination is pursuant
491     to the lease and applicable law; or
492          (b) enforcement of a security interest in compliance with Title 70A, Chapter 9a,
493     Uniform Commercial Code - Secured Transactions, other than acceptance of collateral in full
494     or partial satisfaction of the obligation it secures.
495          (6) Except as otherwise provided in this section, a transfer is not voidable under
496     Subsection [25-6-6] 25-6-203(2):
497          (a) to the extent the insider gave new value to or for the benefit of the debtor after the
498     transfer was made [unless], except to the extent the new value was secured by a valid lien;
499          (b) if made in the ordinary course of business or financial affairs of the debtor and the
500     insider; or
501          (c) if made pursuant to a good-faith effort to rehabilitate the debtor and the transfer
502     secured present value given for that purpose as well as an antecedent debt of the debtor.
503          (7) [Notwithstanding the foregoing, a] A transfer is not voidable under Section
504     [25-6-5] 25-6-202 or Subsection [25-6-6] 25-6-203(1) if:
505          (a) the transfer was made by the debtor:
506          (i) in payment of or in exchange for goods, services, or other consideration obtained by
507     the debtor or a third party from a merchant in the ordinary course of the merchant's business; or
508          (ii) in payment of amounts loaned or advanced by a merchant or a credit or financing
509     company to pay for the goods, services, or other consideration obtained by the debtor or a third
510     party from a merchant in the ordinary course of the merchant's business;
511          (b) the goods, services, or other consideration obtained from the merchant or the
512     amounts loaned or advanced by the merchant or the credit or financing company in payment of
513     the goods, services, or other consideration obtained from the merchant in the ordinary course of
514     the merchant's business was of a reasonably equivalent value to the transfer, as provided in

515     Subsection (8); and
516          (c) the transferee received the transfer in good faith, in the ordinary course of the
517     transferee's business, and without actual knowledge that:
518          (i) the transfer was made by the debtor with actual intent to hinder, delay, or defraud
519     any creditor of the debtor; or
520          (ii) that the debtor was insolvent at the time the transfer was made.
521          (8) For purposes of Subsection (7):
522          (a) the term "merchant" means the same as that term is defined in Section 70A-2-104;
523          (b) where the value of the goods, services, or other consideration obtained from the
524     merchant, or where the value of the amounts loaned or advanced by a merchant or a credit or
525     financing company in payment of the goods, services, or other consideration obtained from the
526     merchant, was reasonably equivalent to the value of the transfer, the "reasonably equivalent
527     value" requirement in Subsection (7)(b) will be satisfied regardless of whether the debtor or a
528     third party received the reasonably equivalent value for the transfer; and
529          (c) a transferee's receipt of payment from a debtor is not, and may not be used as,
530     evidence that:
531          (i) the transferee did not act in good faith;
532          (ii) the goods, services, or other consideration were not provided by the merchant in the
533     ordinary course of the merchant's business;
534          (iii) the transferee had actual knowledge that the transfer was made by the debtor with
535     actual intent to hinder, delay, or defraud any creditor of the debtor; or
536          (iv) the debtor was insolvent at the time the transfer was made.
537          (9) The following rules determine the burden of proving matters referred to in this
538     section:
539          (a) a party that seeks to invoke Subsection (1), (4), (5), or (6) has the burden of proving
540     the applicability of that subsection;
541          (b) except as otherwise provided in Subsections (9)(c) and (d), the creditor has the

542     burden of proving each applicable element of Subsection (2) or (3);
543          (c) the transferee has the burden of proving the applicability to the transferee of
544     Subsection (2)(a)(ii)(A) or (B); and
545          (d) a party that seeks adjustment under Subsection (3) has the burden of proving the
546     adjustment.
547          (10) The standard of proof required to establish matters referred to in this section is a
548     preponderance of the evidence.
549          Section 13. Section 25-6-305, which is renumbered from Section 25-6-10 is
550     renumbered and amended to read:
551          [25-6-10].      25-6-305. Claim for relief -- Time limits.
552          A claim for relief [or cause of action] regarding a [fraudulent] transfer or obligation
553     under this chapter is extinguished unless action is brought:
554          (1) under Subsection [25-6-5] 25-6-202(1)(a), [within] no later than four years after the
555     transfer was made or the obligation was incurred or, if later, [within] no later than one year
556     after the transfer or obligation was or could reasonably have been discovered by the claimant;
557          (2) under Subsection [25-6-5] 25-6-202(1)(b) or [25-6-6] 25-6-203(1), [within] no later
558     than four years after the transfer was made or the obligation was incurred; or
559          (3) under Subsection [25-6-6] 25-6-203(2), [within] no later than one year after the
560     transfer was made [or the obligation was incurred].
561          Section 14. Section 25-6-401 is enacted to read:
562     
Part 4. Applicability and Construction

563          25-6-401. Title.
564          This part is known as "Applicability and Construction."
565          Section 15. Section 25-6-402 is enacted to read:
566          25-6-402. Governing law.
567          (1) In this section, the following rules determine the debtor's location:
568          (a) a debtor who is an individual is located at the individual's principal residence;

569          (b) a debtor that is an organization and has only one place of business is located at its
570     place of business; and
571          (c) a debtor that is an organization and has more than one place of business is located
572     at its chief executive office.
573          (2) A claim for relief in the nature of a claim for relief under this chapter is governed
574     by the local law of the jurisdiction in which the debtor is located when the transfer is made or
575     the obligation is incurred.
576          Section 16. Section 25-6-403 is enacted to read:
577          25-6-403. Application to series organization.
578          (1) As used in this section:
579          (a) "Protected series" means an arrangement, however denominated, created by a series
580     organization that, pursuant to the law under which the series organization is organized, has the
581     characteristics described in Subsection (1)(b).
582          (b) "Series organization" means an organization that, pursuant to the law under which
583     it is organized, has the following characteristics:
584          (i) the organic record of the organization provides for creation by the organization of
585     one or more protected series, however denominated, with respect to specified property of the
586     organization, and for records to be maintained for each protected series that identify the
587     property of or associated with the protected series;
588          (ii) debt incurred or existing with respect to the activities of, or property of or
589     associated with, a particular protected series is enforceable against the property of or associated
590     with the protected series only, and not against the property of or associated with the
591     organization or other protected series of the organization; and
592          (iii) debt incurred or existing with respect to the activities or property of the
593     organization is enforceable against the property of the organization only, and not against the
594     property of or associated with a protected series of the organization.
595          (2) A series organization and each protected series of the organization is a separate

596     person for purposes of this chapter, even if for other purposes a protected series is not a person
597     separate from the organization or other protected series of the organization.
598          Section 17. Section 25-6-404, which is renumbered from Section 25-6-11 is
599     renumbered and amended to read:
600          [25-6-11].      25-6-404. Legal principles applicable to chapter.
601          Unless displaced by this chapter, the principles of law and equity, including merchant
602     law and the law relating to principal and agent, equitable subordination, estoppel, laches, fraud,
603     misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating
604     cause, supplement this chapter's provisions.
605          Section 18. Section 25-6-405, which is renumbered from Section 25-6-12 is
606     renumbered and amended to read:
607          [25-6-12].      25-6-405. Construction of chapter.
608          This chapter shall be applied and construed to effectuate its general purpose to make
609     uniform the law with respect to the subject of this chapter among states enacting it.
610          Section 19. Section 25-6-406, which is renumbered from Section 25-6-13 is
611     renumbered and amended to read:
612          [25-6-13].      25-6-406. Applicability of chapter.
613          (1) This [act] chapter applies when any transfer occurs after the effective date of this
614     act.
615          (2) The amendments to this chapter that take effect on May 9, 2017:
616          (a) apply to a transfer made or obligation incurred on or after May 9, 2017;
617          (b) do not apply to a transfer made or obligation incurred before May 9, 2017; and
618          (c) do not apply to a right of action that has accrued before May 9, 2017.
619          (3) For purposes of Subsection (2), a transfer is made and an obligation is incurred at
620     the time provided in Section 25-6-302.
621          Section 20. Section 25-6-407 is enacted to read:
622          25-6-407. Relation to Electronic Signatures in Global and National Commerce

623     Act.
624          This chapter modifies, limits, or supersedes the Electronic Signatures in Global and
625     National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede
626     Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the
627     notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).
628          Section 21. Section 25-6-501 is enacted to read:
629     
Part 5. Asset Protection Trust

630          25-6-501. Title.
631          This part is known as "Asset Protection Trust."
632          Section 22. Section 25-6-502, which is renumbered from Section 25-6-14 is
633     renumbered and amended to read:
634          [25-6-14].      25-6-502. Asset protection trust.
635          (1) As used in this section:
636          (a) "Creditor" means:
637          (i) a creditor or other claimant of the settlor existing when the trust is created; or
638          (ii) a person who subsequently becomes a creditor, including, whether or not reduced
639     to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
640     undisputed, legal, equitable, secured, or unsecured:
641          (A) one holding or seeking to enforce a judgment entered by a court or other body
642     having adjudicative authority; or
643          (B) one with a right to payment.
644          (b) "Property" means real property, personal property, and interests in real or personal
645     property.
646          (c) "Settlor" means a person who transfers property in trust.
647          (d) "Transfer" means any form of transfer of property, including gratuitous transfers,
648     whether by deed, conveyance, or assignment.
649          (e) "Trust" has the same meaning as in Section 75-1-201.

650          (2) "Paid and delivered" to the settlor, as beneficiary, does not include the settlor's use
651     or occupancy of real property or tangible personal property owned by the trust if the use or
652     occupancy is in accordance with the trustee's discretionary authority under the trust instrument.
653          (3) If the settlor of an irrevocable trust is also a beneficiary of the trust, and if the
654     requirements of Subsection (5) are satisfied, a creditor of the settlor may not:
655          (a) satisfy a claim or liability of the settlor in either law or equity out of the settlor's
656     transfer to the trust or the settlor's beneficial interest in the trust;
657          (b) force or require the trustee to make a distribution to the settlor, as beneficiary; or
658          (c) require the trustee to pay any distribution directly to the creditor, or otherwise
659     attach the distribution before it has been paid or delivered by the trustee to the settlor, as
660     beneficiary.
661          (4) Notwithstanding Subsection (3), nothing in this section prohibits a creditor from
662     satisfying a claim or liability from the distribution once it has been paid or delivered by the
663     trustee to the settlor, as beneficiary.
664          (5) In order for Subsection (3) to apply, the conditions in this Subsection (5) shall be
665     satisfied. Where this Subsection (5) requires that a provision be included in the trust
666     instrument, no particular language need be used in the trust instrument if the meaning of the
667     trust provision otherwise complies with this Subsection (5).
668          (a) The trust instrument shall provide that the trust is governed by Utah law and is
669     established pursuant to this section.
670          (b) The trust instrument shall require that at all times at least one trustee shall be a
671     Utah resident or Utah trust company, as the term "trust company" is defined in Section 7-5-1.
672          (c) The trust instrument shall provide that neither the interest of the settlor, as
673     beneficiary, nor the income or principal of the trust may be voluntarily or involuntarily
674     transferred by the settlor, as beneficiary. The provision shall be considered to be a restriction
675     on the transfer of the settlor's beneficial interest in the trust that is enforceable under applicable
676     nonbankruptcy law within the meaning of Section 541(c)(2) of the Bankruptcy Code.

677          (d) The settlor may not have the ability under the trust instrument to revoke, amend, or
678     terminate all or any part of the trust, or to withdraw property from the trust, without the consent
679     of a person who has a substantial beneficial interest in the trust, which interest would be
680     adversely affected by the exercise of the power held by the settlor.
681          (e) The trust instrument may not provide for any mandatory distributions of either
682     income or principal to the settlor, as beneficiary, except as provided in Subsection (7)(f).
683          (f) The settlor may not benefit from, direct a distribution of, or use trust property
684     except as stated in the trust instrument. An agreement or understanding, express or implied,
685     between the settlor and the trustee that attempts to grant or permit the retention of greater rights
686     or authority than is stated in the trust instrument is void.
687          (g) The trust instrument shall require that, at least 30 days before making any
688     distribution to the settlor, as beneficiary, the trustee notify in writing every person who has a
689     child support judgment or order against the settlor. The trust instrument shall require that the
690     notice state the date the distribution will be made and the amount of the distribution.
691          (h) At the time that the settlor transfers any assets to the trust, the settlor may not be in
692     default of making a payment due under any child support judgment or order.
693          (i) A transfer of assets to the trust may not render the settlor insolvent.
694          (j) At the time the settlor transfers any assets to the trust, the settlor may not intend to
695     hinder, delay, or defraud a known creditor by transferring the assets to the trust. A settlor's
696     expressed intention to protect trust assets from the settlor's potential future creditors is not
697     evidence of an intent to hinder, delay, or defraud a known creditor.
698          (k) At the time that the settlor transfers any assets to the trust, the settlor may not be
699     contemplating filing for relief under the provisions of the Bankruptcy Code.
700          (l) Assets transferred to the trust may not be derived from unlawful activities.
701          (m) At the time the settlor transfers any assets to the trust, the settlor shall sign a sworn
702     affidavit stating that:
703          (i) the settlor has full right, title, and authority to transfer the assets to the trust;

704          (ii) the transfer of the assets to the trust will not render the settlor insolvent;
705          (iii) the settlor does not intend to hinder, delay, or defraud a known creditor by
706     transferring the assets to the trust;
707          (iv) there are no pending or threatened court actions against the settlor, except for those
708     court actions identified by the settlor on an attachment to the affidavit;
709          (v) the settlor is not involved in any administrative proceedings, except those
710     administrative proceedings identified on an attachment to the affidavit;
711          (vi) at the time of the transfer of the assets to the trust, the settlor is not in default of a
712     child support obligation;
713          (vii) the settlor does not contemplate filing for relief under the provisions of the
714     Bankruptcy Code; and
715          (viii) the assets being transferred to the trust were not derived from unlawful activities.
716          (6) Failure to satisfy the requirements of Subsection (5) shall result in the
717     consequences described in this Subsection (6).
718          (a) If any requirement of Subsections (5)(a) through (g) is not satisfied, none of the
719     property held in the trust will at any time have the benefit of the protections described in
720     Subsection (3).
721          (b) If the trustee does not send the notice required under Subsection (5)(g), the court
722     may authorize any person with a child support judgment or order against the settlor to whom
723     notice was not sent to attach the distribution or future distributions, but the person may not:
724          (i) satisfy a claim or liability in either law or equity out of the settlor's transfer to the
725     trust or the settlor's beneficial interest in the trust; or
726          (ii) force or require the trustee to make a distribution to the settlor, as beneficiary.
727          (c) If any requirement set forth in Subsections (5)(h) through (m) is not satisfied, the
728     property transferred to the trust that does not satisfy the requirement may not have the benefit
729     of the protections described in Subsection (3).
730          (7) The provisions of Subsection (3) may apply to a trust even if:

731          (a) the settlor serves as a cotrustee or as an advisor to the trustee, provided that the
732     settlor may not participate in the determination as to whether a discretionary distribution will
733     be made;
734          (b) the settlor has the authority under the terms of the trust instrument to appoint
735     nonsubordinate advisors or trust protectors who can remove and appoint trustees and who can
736     direct, consent to, or disapprove distributions;
737          (c) the settlor has the power under the terms of the trust instrument to serve as an
738     investment director or to appoint an investment director under Section 75-7-906;
739          (d) the trust instrument gives the settlor the power to veto a distribution from the trust;
740          (e) the trust instrument gives the settlor a testamentary nongeneral power of
741     appointment or similar power;
742          (f) the trust instrument gives the settlor the right to receive the following types of
743     distributions:
744          (i) income, principal, or both in the discretion of a person, including a trustee, other
745     than the settlor;
746          (ii) principal, subject to an ascertainable standard set forth in the trust;
747          (iii) income or principal from a charitable remainder annuity trust or charitable
748     remainder unitrust, as defined in 26 U.S.C. 664;
749          (iv) a percentage of the value of the trust each year as determined under the trust
750     instrument, but not exceeding the amount that may be defined as income under 26 U.S.C.
751     643(b);
752          (v) the transferor's potential or actual use of real property held under a qualified
753     personal residence trust, or potential or actual possession of a qualified annuity interest, within
754     the meaning of 26 U.S.C. 2702 and the accompanying regulations; and
755          (vi) income or principal from a grantor retained annuity trust or grantor retained
756     unitrust that is allowed under 26 U.S.C. 2702; or
757          (g) the trust instrument authorizes the settlor to use real or personal property owned by

758     the trust.
759          (8) If a trust instrument contains the provisions described in Subsections (5)(a) through
760     (g), the transfer restrictions prevent a creditor or other person from asserting any cause of
761     action or claim for relief against a trustee of the trust or against others involved in the
762     counseling, drafting, preparation, execution, or funding of the trust for conspiracy to commit
763     fraudulent conveyance, aiding and abetting a fraudulent conveyance, participation in the trust
764     transaction, or similar cause of action or claim for relief. For purposes of this subsection,
765     counseling, drafting, preparation, execution, or funding of the trust includes the preparation and
766     funding of a limited partnership, a limited liability company, or other entity if interests in the
767     entity are subsequently transferred to the trust. The creditor and other person prevented from
768     asserting a cause of action or claim for relief may assert a cause of action against, and are
769     limited to recourse against, only:
770          (a) the trust and the trust assets; and
771          (b) the settlor, to the extent otherwise allowed in this section.
772          (9) A cause of action or claim for relief regarding a fraudulent transfer of a settlor's
773     assets under Subsection (5)(j) is extinguished unless the action under Subsection (5)(j) is
774     brought by a creditor of the settlor who was a creditor of the settlor before the assets referred to
775     in Subsection (5)(j) were transferred to the trust and the action under Subsection (5)(j) is
776     brought within the earlier of:
777          (a) the later of:
778          (i) two years after the transfer is made; or
779          (ii) one year after the transfer is or reasonably could have been discovered by the
780     creditor if the creditor:
781          (A) can demonstrate, by a preponderance of the evidence, that the creditor asserted a
782     specific claim against the settlor before the transfer; or
783          (B) files another action, other than an action under Subsection (5)(j), against the settlor
784     that asserts a claim based on an act or omission of the settlor that occurred before the transfer,

785     and the action described in this Subsection (9) is filed within two years after the transfer.
786          (b) (i) with respect to a creditor known to the settlor, 120 days after the date on which
787     notice of the transfer is mailed to the creditor, which notice shall state the name and address of
788     the settlor, the name and address of the trustee, and also describe the assets that were
789     transferred, but does not need to state the value of those assets if the assets are other than cash,
790     and which shall inform the creditor that he is required to present his claim to both the settlor
791     and the trustee within 120 days from the mailing of the notice or be forever barred; or
792          (ii) with respect to a creditor not known to the settlor, 120 days after the date on which
793     notice of the transfer is first published in a newspaper of general circulation in the county in
794     which the settlor then resides, which notice shall state the name and address of the settlor, the
795     name and address of the trustee, and also describe the assets that were transferred, but does not
796     need to state the value of those assets if the assets are other than cash.
797          (10) The notice required in Subsection (9)(b) shall be published in accordance with the
798     provisions of Section 45-1-101 for three consecutive weeks and inform creditors that they are
799     required to present claims within 120 days from the first publication of the notice or be forever
800     barred.
801          (11) (a) A trust is subject to this section if it is governed by Utah law, as provided in
802     Section 75-7-107, and if it otherwise meets the requirements of this section.
803          (b) A court of this state has exclusive jurisdiction over an action or claim for relief that
804     is based on a transfer of property to a trust that is the subject of this section.
805          Section 23. Section 31A-27a-507 is amended to read:
806          31A-27a-507. Receiver as lien creditor.
807          (1) The receiver may avoid a transfer of or lien on the property of, or obligation
808     incurred by, an insurer that the insurer or a policyholder, creditor, member, or stockholder of
809     the insurer:
810          (a) may have avoided without regard to any knowledge of:
811          (i) the receiver;

812          (ii) the commissioner;
813          (iii) the insurer; or
814          (iv) a policyholder, creditor, member, or stockholder of the insurer; and
815          (b) whether or not a policyholder, creditor, member, or stockholder described in this
816     Subsection (1) exists.
817          (2) The receiver is considered a creditor without knowledge for purposes of pursuing
818     claims under:
819          (a) Title 25, Chapter 6, Uniform [Fraudulent Transfer] Voidable Transactions Act; or
820          (b) similar provisions of state or federal law.
821          Section 24. Section 70A-2-402 is amended to read:
822          70A-2-402. Rights of seller's creditors against sold goods.
823          (1) Except as provided in Subsections (2) and (3), rights of unsecured creditors of the
824     seller with respect to goods which have been identified to a contract for sale are subject to the
825     buyer's rights to recover the goods under this chapter (Sections 70A-2-502 and 70A-2-716).
826          (2) A creditor of the seller may treat a sale or an identification of goods to a contract
827     for sale as void if as against him a retention of possession by the seller is fraudulent under any
828     rule of law of the state where the goods are situated, except that retention of possession in good
829     faith and current course of trade by a merchant-seller for a commercially reasonable time after
830     a sale or identification is not fraudulent.
831          (3) Nothing in this chapter shall be deemed to impair the rights of creditors of the
832     seller:
833          (a) under the provisions of the chapter on Secured Transactions (Chapter 9a, Uniform
834     Commercial Code - Secured Transactions); or
835          (b) where identification to the contract or delivery is made not in current course of
836     trade but in satisfaction of or as security for a preexisting claim for money, security or the like
837     and is made under circumstances which under any rule of law of the state where the goods are
838     situated would apart from this chapter constitute the transaction a [fraudulent transfer] voidable

839     transaction or voidable preference.
840          Section 25. Section 70A-2a-308 is amended to read:
841          70A-2a-308. Special rights of creditors.
842          (1) A creditor of a lessor in possession of goods subject to a lease contract may treat
843     the lease contract as void if as against the creditor retention of possession by the lessor is
844     fraudulent or voids the lease contract under any statute or rule of law, but retention of
845     possession in good faith and current course of trade by the lessor for a commercially reasonable
846     time after the lease contract becomes enforceable is not fraudulent and does not void the lease
847     contract.
848          (2) Nothing in this chapter impairs the rights of creditors of a lessor if the lease
849     contract is made under circumstances which under any statute or rule of law apart from the
850     chapter would constitute the transaction a [fraudulent transfer] voidable transaction or voidable
851     preference.
852          (3) A creditor of a seller may treat a sale or an identification of goods to a contract for
853     sale as void if as against the creditor retention of possession by the seller is fraudulent under
854     any statute or rule of law, but retention of possession of the goods pursuant to a lease contract
855     entered into by the seller as lessee and the buyer as lessor in connection with the sale or
856     identification of the goods is not fraudulent if the buyer bought for value and in good faith.
857          Section 26. Section 75-2-205 is amended to read:
858          75-2-205. Decedent's nonprobate transfers to others.
859          Unless excluded under Section 75-2-208, the value of the augmented estate includes the
860     value of the decedent's nonprobate transfers to others, not included under Section 75-2-204, of
861     any of the types described in this section, in the amount provided respectively for each type of
862     transfer:
863          (1) Property owned or owned in substance by the decedent immediately before death
864     that passed outside probate at the decedent's death. Property included under this category
865     consists of the property described in this Subsection (1).

866          (a) (i) Property over which the decedent alone, immediately before death, held a
867     presently exercisable general power of appointment.
868          (ii) The amount included is the value of the property subject to the power, to the extent
869     the property passed at the decedent's death, by exercise, release, lapse, in default, or otherwise,
870     to or for the benefit of any person other than the decedent's estate or surviving spouse.
871          (b) (i) The decedent's fractional interest in property held by the decedent in joint
872     tenancy with the right of survivorship.
873          (ii) The amount included is the value of the decedent's fractional interest, to the extent
874     the fractional interest passed by right of survivorship at the decedent's death to a surviving joint
875     tenant other than the decedent's surviving spouse.
876          (c) (i) The decedent's ownership interest in property or accounts held in POD, TOD, or
877     co-ownership registration with the right of survivorship.
878          (ii) The amount included is the value of the decedent's ownership interest, to the extent
879     the decedent's ownership interest passed at the decedent's death to or for the benefit of any
880     person other than the decedent's estate or surviving spouse.
881          (d) (i) Proceeds of insurance, including accidental death benefits, on the life of the
882     decedent, if the decedent owned the insurance policy immediately before death or if and to the
883     extent the decedent alone and immediately before death held a presently exercisable general
884     power of appointment over the policy or its proceeds.
885          (ii) The amount included:
886          (A) is the value of the proceeds, to the extent they were payable at the decedent's death
887     to or for the benefit of any person other than the decedent's estate or surviving spouse; and
888          (B) may not exceed the greater of the cash surrender value of the policy immediately
889     prior to the death of the decedent or the amount of premiums paid on the policy during the
890     decedent's life.
891          (2) Property transferred in any of the forms described in this Subsection (2) by the
892     decedent during marriage:

893          (a) (i) Any irrevocable transfer in which the decedent retained the right to the
894     possession or enjoyment of, or to the income from, the property if and to the extent the
895     decedent's right terminated at or continued beyond the decedent's death.
896          (ii) An irrevocable transfer in trust which includes a restriction on transfer of the
897     decedent's interest as settlor and beneficiary as described in Section [25-6-14] 25-6-502.
898          (iii) The amount included is the value of the fraction of the property to which the right
899     or restriction related, to the extent the fraction of the property passed outside probate to or for
900     the benefit of any person other than the decedent's estate or surviving spouse.
901          (b) (i) Any transfer in which the decedent created a power over income or property,
902     exercisable by the decedent alone or in conjunction with any other person, or exercisable by a
903     nonadverse party, to or for the benefit of the decedent, creditors of the decedent, the decedent's
904     estate, or creditors of the decedent's estate.
905          (ii) The amount included with respect to a power over property is the value of the
906     property subject to the power, and the amount included with respect to a power over income is
907     the value of the property that produces or produced the income, to the extent the power in
908     either case was exercisable at the decedent's death to or for the benefit of any person other than
909     the decedent's surviving spouse or to the extent the property passed at the decedent's death, by
910     exercise, release, lapse, in default, or otherwise, to or for the benefit of any person other than
911     the decedent's estate or surviving spouse.
912          (iii) If the power is a power over both income and property and Subsection (2)(b)(ii)
913     produces different amounts, the amount included is the greater amount.
914          (3) Property that passed during marriage and during the two-year period next preceding
915     the decedent's death as a result of a transfer by the decedent if the transfer was of any of the
916     types described in this Subsection (3).
917          (a) (i) Any property that passed as a result of the termination of a right or interest in, or
918     power over, property that would have been included in the augmented estate under Subsection
919     (1)(a), (b), or (c), or under Subsection (2), if the right, interest, or power had not terminated

920     until the decedent's death.
921          (ii) The amount included is the value of the property that would have been included
922     under Subsection (1)(a), (b), (c), or Subsection (2) if the property were valued at the time the
923     right, interest, or power terminated, and is included only to the extent the property passed upon
924     termination to or for the benefit of any person other than the decedent or the decedent's estate,
925     spouse, or surviving spouse.
926          (iii) (A) As used in this Subsection (3)(a), "termination," with respect to a right or
927     interest in property, occurs when the right or interest terminated by the terms of the governing
928     instrument or the decedent transferred or relinquished the right or interest, and, with respect to
929     a power over property, occurs when the power terminated by exercise, release, lapse, default, or
930     otherwise.
931          (B) With respect to a power described in Subsection (1)(a), "termination" occurs when
932     the power terminated by exercise or release, but not otherwise.
933          (b) (i) Any transfer of or relating to an insurance policy on the life of the decedent if
934     the proceeds would have been included in the augmented estate under Subsection (1)(d) had
935     the transfer not occurred.
936          (ii) The amount included:
937          (A) is the value of the insurance proceeds to the extent the proceeds were payable at
938     the decedent's death to or for the benefit of any person other than the decedent's estate or
939     surviving spouse; and
940          (B) may not exceed the greater of the cash surrender value of the policy immediately
941     prior to the death of the decedent or the amount of premiums paid on the policy during the
942     decedent's life.
943          (c) (i) Any transfer of property, to the extent not otherwise included in the augmented
944     estate, made to or for the benefit of a person other than the decedent's surviving spouse.
945          (ii) The amount included is the value of the transferred property to the extent the
946     aggregate transfers to any one donee in either of the two years exceeded $10,000.

947          Section 27. Section 75-7-105 is amended to read:
948          75-7-105. Default and mandatory rules.
949          (1) Except as otherwise provided in the terms of the trust, this chapter governs the
950     duties and powers of a trustee, relations among trustees, and the rights and interests of a
951     beneficiary.
952          (2) Except as specifically provided in this chapter, the terms of a trust prevail over any
953     provision of this chapter except:
954          (a) the requirements for creating a trust;
955          (b) the duty of a trustee to act in good faith and in accordance with the purposes of the
956     trust;
957          (c) the requirement that a trust and its terms be for the benefit of its beneficiaries;
958          (d) the power of the court to modify or terminate a trust under Sections 75-7-410
959     through 75-7-416;
960          (e) the effect of a spendthrift provision, Section [25-6-14] 25-6-502, and the rights of
961     certain creditors and assignees to reach a trust as provided in Part 5, Creditor's Claims -
962     Spendthrift and Discretionary Trusts;
963          (f) the power of the court under Section 75-7-702 to require, dispense with, or modify
964     or terminate a bond;
965          (g) the effect of an exculpatory term under Section 75-7-1008;
966          (h) the rights under Sections 75-7-1010 through 75-7-1013 of a person other than a
967     trustee or beneficiary;
968          (i) periods of limitation for commencing a judicial proceeding; and
969          (j) the subject-matter jurisdiction of the court and venue for commencing a proceeding
970     as provided in Sections 75-7-203 and 75-7-205.
971          Section 28. Section 75-7-107 is amended to read:
972          75-7-107. Governing law.
973          (1) For purposes of this section:

974          (a) "Foreign trust" means a trust that is created in another state or country and valid in
975     the state or country in which the trust is created.
976          (b) "State law provision" means a provision that the laws of a named state govern the
977     validity, construction, and administration of a trust.
978          (2) If a trust has a state law provision specifying this state, the validity, construction,
979     and administration of the trust are to be governed by the laws of this state if any administration
980     of the trust is done in this state.
981          (3) For all trusts created on or after December 31, 2003, if a trust does not have a state
982     law provision, the validity, construction, and administration of the trust are to be governed by
983     the laws of this state if the trust is administered in this state.
984          (4) A trust shall be considered to be administered in this state if:
985          (a) the trust states that this state is the place of administration, and any administration
986     of the trust is done in this state; or
987          (b) the place of business where the fiduciary transacts a major portion of its
988     administration of the trust is in this state.
989          (5) If a foreign trust is administered in this state as provided in this section, the
990     following provisions are effective and enforceable under the laws of this state:
991          (a) a provision in the trust that restricts the transfer of trust assets in a manner similar
992     to Section [25-6-14] 25-6-502;
993          (b) a provision that allows the trust to be perpetual; or
994          (c) a provision that is not expressly prohibited by the law of this state.
995          (6) A foreign trust that moves its administration to this state is valid whether or not the
996     trust complied with the laws of this state at the time of the trust's creation or after the trust's
997     creation.
998          (7) Unless otherwise designated in the trust instrument, a trust is administered in this
999     state if it meets the requirements of Subsection (4).
1000          Section 29. Section 75-7-301 is amended to read:

1001          75-7-301. Basic effect.
1002          (1) Notice to a person who may represent and bind another person under this part has
1003     the same effect as if notice were given directly to the other person.
1004          (2) The consent of a person who may represent and bind another person under this part
1005     is binding on the person represented unless the person represented objects to the representation
1006     before the consent would otherwise have become effective.
1007          (3) Except as otherwise provided in Sections 75-7-411 and [25-6-14] 25-6-502, a
1008     person who under this part may represent a settlor who lacks capacity may receive notice and
1009     give a binding consent on the settlor's behalf.
1010          Section 30. Section 75-7-501 is amended to read:
1011          75-7-501. Rights of beneficiary's creditor or assignee.
1012          To the extent a beneficiary's interest is not protected by a spendthrift provision or
1013     Section [25-6-14] 25-6-502, the court may authorize a creditor or assignee of the beneficiary to
1014     reach the beneficiary's interest by attachment of present or future distributions to or for the
1015     benefit of the beneficiary or other means. The court may limit the award to relief as is
1016     appropriate under the circumstances.
1017          Section 31. Section 75-7-505 is amended to read:
1018          75-7-505. Creditor's claim against settlor.
1019          (1) Whether or not the terms of a trust contain a spendthrift provision, the following
1020     rules apply:
1021          (a) During the lifetime of the settlor, the property of a revocable trust is subject to the
1022     claims of the settlor's creditors. If a trust has more than one settlor, the amount the creditor or
1023     assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of
1024     the trust attributable to that settlor's contribution.
1025          (b) With respect to an irrevocable trust other than an irrevocable trust that meets the
1026     requirements of Section [25-6-14] 25-6-502, a creditor or assignee of the settlor may reach the
1027     maximum amount that can be distributed to or for the settlor's benefit. If the trust has more

1028     than one settlor, the amount the creditor or assignee of a particular settlor may reach may not
1029     exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution.
1030          (c) After the death of a settlor, and subject to the settlor's right to direct the source from
1031     which liabilities will be paid, the property of a trust that was revocable at the settlor's death, but
1032     not property received by the trust as a result of the death of the settlor which is otherwise
1033     exempt from the claims of the settlor's creditors, is subject to claims of the settlor's creditors,
1034     costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal
1035     of remains, and statutory allowances to a surviving spouse and children to the extent the
1036     settlor's probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.
1037          (2) For purposes of this section:
1038          (a) during the period the power may be exercised, the holder of a power of withdrawal
1039     is treated in the same manner as the settlor of a revocable trust to the extent of the property
1040     subject to the power; and
1041          (b) upon the lapse, release, or waiver of the power, the holder is treated as the settlor of
1042     the trust only to the extent the value of the property affected by the lapse, release, or waiver
1043     exceeds the greater of the amount specified in Subsection 2041(b)(2), 2514(e), or Section
1044     2503(b) of the Internal Revenue Code of 1986, in each case as in effect on May 1, 2004.
1045          Section 32. Section 75-7-816 is amended to read:
1046          75-7-816. Recitals when title to real property is in trust -- Failure.
1047          (1) When title to real property is granted to a person as trustee, the terms of the trust
1048     may be given either:
1049          (a) in the deed of transfer; or
1050          (b) in an instrument signed by the grantor and recorded in the same office as the grant
1051     to the trustee.
1052          (2) If the terms of the trust are not made public as required in Subsection (1), a
1053     conveyance from the trustee is absolute in favor of purchasers for value who take the property
1054     without notice of the terms of the trust.

1055          (3) The terms of the trust recited in the deed of transfer or the instrument recorded
1056     under Subsection (1)(b) shall include:
1057          (a) the name of the trustee;
1058          (b) the address of the trustee; and
1059          (c) the name and date of the trust.
1060          (4) Any real property titled in a trust which has a restriction on transfer described in
1061     Section [25-6-14] 25-6-502 shall include in the title the words "asset protection trust."
1062          Section 33. Section 78B-2-302 is amended to read:
1063          78B-2-302. Within one year.
1064          An action may be brought within one year:
1065          (1) for liability created by the statutes of a foreign state;
1066          (2) upon a statute for a penalty or forfeiture where the action is given to an individual,
1067     or to an individual and the state, except when the statute imposing it prescribes a different
1068     limitation;
1069          (3) except as provided in Section 78B-2-307.5, upon a statute, or upon an undertaking
1070     in a criminal action, for a forfeiture or penalty to the state;
1071          (4) for libel, slander, false imprisonment, or seduction;
1072          (5) against a sheriff or other officer for the escape of a prisoner arrested or imprisoned
1073     upon either civil or criminal process;
1074          (6) against a municipal corporation for damages or injuries to property caused by a
1075     mob or riot;
1076          (7) except as otherwise expressly provided by statute, against a county legislative body
1077     or a county executive to challenge a decision of the county legislative body or county
1078     executive, respectively; [or]
1079          (8) on a claim for relief or a cause of action under Title 63L, Chapter 5, Utah Religious
1080     Land Use Act[.]; or
1081          (9) for a claim for relief or a cause of action under Subsection 25-6-203(2).

1082          Section 34. Section 78B-2-307 is amended to read:
1083          78B-2-307. Within four years.
1084          An action may be brought within four years:
1085          (1) after the last charge is made or the last payment is received:
1086          (a) upon a contract, obligation, or liability not founded upon an instrument in writing;
1087          (b) on an open store account for any goods, wares, or merchandise; or
1088          (c) on an open account for work, labor or services rendered, or materials furnished;
1089          (2) for a claim for relief or a cause of action under the following sections of Title 25,
1090     Chapter 6, Uniform [Fraudulent Transfer] Voidable Transactions Act:
1091          (a) Subsection [25-6-5] 25-6-202(1)(a), [which] except in specific situations [limits]
1092     where the time for action is limited to one year[,] under Section [25-6-10] 25-6-305;
1093          (b) Subsection [25-6-5] 25-6-202(1)(b); or
1094          (c) Subsection [25-6-6] 25-6-203(1); and
1095          (3) for relief not otherwise provided for by law.