The Tennessee Attorney General has issued an opinion on Tennessee Asset Protection Trusts. For those of you who do not know, the Tennessee Investment Services Act allows a person to create an asset protection trust that shields assets from future creditors. The Attorney General clarified that “with respect to a creditor’s claim arising after a qualified disposition, Tenn. Code Ann. 35-16-104(a) grafts an additional limitation on the UFTA’s [Uniform Fraudulent Transfer Act] provisions by requiring such a creditor to show that the qualified disposition was made with the actual intent to defraud the creditor.” In sum, good news for people using trusts and bad news for creditors.
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