COA Review of Uniform Fraudulent Transfer Act Has Relevance to Divorce Property Settlement Issues

By Michael R. Kohlhaas


Holland v. Ketcham (December 27, 2021) (Family Law Collections Case)


This is not a family law case per se, but I am sharing it anyway because of its potential relevance to divorce property settlement issues.


Pursuant to the parties’ 2018 Decree, Wife owed Husband a property settlement payment of $200,000. As the 90-day payment deadline approached, Wife used cash assets awarded to her under the Decree to purchase real estate for $200,000, and took title to the property in joint name with her Boyfriend who did not contribute to the purchase. Wife and Boyfriend later married, and the property was transferred into joint tenancy by the entireties.


Husband apparently only later became aware of these transactions, and then sued Wife and Boyfriend under Indiana’s Uniform Fraudulent Transfer Act. The trial court concluded that Husband had no claim against Boyfriend because he was not a debtor to Husband. As to Husband’s claim against Wife, the trial court concluded that Husband had failed to meet his burden of establishing an intent to defraud. Husband appealed.


The Court of Appeals reviewed Indiana’s adoption of the Uniform Fraudulent Transfer Act and its guidance for making a determination of fraudulent intent. “Considering the force and effect of the factors as a whole, we hold that the evidentiary submissions [to the trial court] demonstrate a pattern of fraudulent intent by [Wife]. We therefore reverse the trial court’s judgment . . . .”


As to the trial court’s denial of Husband’s claim against Boyfriend, that was also reversed. The Court concluded that Husband had established a civil conspiracy between Wife and Boyfriend to commit a fraudulent transfer.


The matter was remanded to the trial court with instructions to issue an immediate injunction to prevent Wife and Boyfriend from transferring the real estate in question while the trial court fashions an appropriate remedy for the fraudulent transfer.

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James A. Reed and Michael R. Kohlhaas represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Cross Glazier Reed Burroughs, PC, is the premiere boutique family law firm in the state of Indiana. Visit the firm’s website at https://www.cgblawfirm.com.


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