Wife’s Fraudulent Transfer Claim Against Husband For Transferring Business Interests To Trust Failed Due To The Statute Of Repose

In Austin v. Mitchell, “a wife filed suit alleging her ex-husband fraudulently transferred a portion of his limited partnership interest in a family limited partnership to a trust for the benefit of his children.” No. 05-19-01359-CV, 2021 Tex. App. LEXIS 4536 (Tex. App.—Dallas June 8, 2021, no pet. history). 

The trial court granted summary judgment in favor of the husband and the wife appealed. The court of appeals first addressed the husband’s statute of repose defense. The wife claimed that the husband’s transfer was fraudulent because it was made:

without fair consideration and the husband was left insolvent as a result; with actual intent to hinder, delay, or defraud the wife; or without receiving reasonably equivalent value at a time when the husband believed or should have believed his debt to the wife was beyond his ability to pay as payments became due.

The court affirmed the summary judgment after it found that the evidence showed that the wife should have known of the transfer more than four years before the suit due to the husband’s testimony in a deposition, in which the Wife’s attorney was present. 

Although the wife argued that she had standing, the court disagreed stating that the wife did not have sufficient connection to the trust. 

See David Fowler Johnson, Wife’s Fraudulent Transfer Claim Against Husband For Transferring Business Interests To Trust Failed Due To The Statute Of Repose, Texas Fiduciary Litigator: The Intersection of Texas Courts and the Fiduciary Field, June 29, 2021. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2021/07/wifes-fraudulent-transfer-claim-against-husband-for-transferring-business-interests-to-trust-failed-.html