§ 30-4-8-8 — Prohibited claims against property subject of a qualified disposition; exceptions; extinguishing a claim

(a) Except as provided in subsection (e), a claim
against property that is the subject of a qualified disposition to a legacy
trust is barred by section 7 of this chapter unless the claim is one (1) of
the following:
(1) Except as provided in subsection (b), an action brought in
Indiana under the Uniform Fraudulent Transfer Act (IC 32-18-2)
in which the requirements for recovery under the act are met by
clear and convincing evidence.
(2) An action to enforce the child support obligations of the
transferor under a judgment or court order.
(3) A court judgment or order for the division of property in a
dissolution of the transferor's marriage or a legal separation
between the transferor and the transferor's spouse, if the
transferor's qualified distribution to the legacy trust was made:
(A) after the date of the transferor's marriage that is subject to
the dissolution or legal separation; or
(B) within thirty (30) days before the date of the transferor's
marriage that is subject to the dissolution or legal separation
unless the transferor provided written notice of the qualified
disposition to the other party to the marriage at least three (3)
days before making the qualified disposition.
(b) A claim brought under an action described in subsection (a)(1)
is extinguished unless:
(1) the creditor's claim arose before the qualified disposition to a
legacy trust was made and the action is brought not later than the
later of:
(A) two (2) years after the transfer was made; or
(B) six (6) months after the transfer:
(i) was recorded or made a public record; or
(ii) if not recorded or made a public record, was discovered
or could have reasonably been discovered by the creditor; or
(2) notwithstanding IC 32-18-2-19, the creditor's claim arose
concurrent with or after the qualified disposition and the action is
brought not more than two (2) years after the date of the qualified
disposition.
(c) A qualified disposition made by a transferor who is a trustee is
considered for purposes of this chapter to have been made on the date
that the property that is subject to the qualified disposition was
originally transferred in trust to the trustee or any predecessor trustee
and the condition set forth in section 4(3) of this chapter is satisfied.
(d) If more than one (1) qualified disposition is made by means of
the same legacy trust:
(1) the making of a subsequent qualified disposition is
disregarded when determining whether a creditor's claim with
respect to a prior qualified disposition is extinguished under
subsection (b); and
(2) any distribution to a beneficiary is considered to have been
made from the latest qualified disposition.
(e) If the state of Indiana is a creditor of a transferor, then
notwithstanding subsection (a)(1) and subsection (b), the state of
Indiana may bring an action against a qualified trustee to assert a claim
against or to recover property that is the subject of a qualified
disposition by proceeding under the Indiana Uniform Fraudulent
Transfer Act, subject to the standard of evidence in IC 32-18-2-14 and
IC 32-18-2-15, and the limitation periods in IC 32-18-2-19.

Legislative History

As added by P.L.221-2019, SEC.9. Amended by P.L.231-2019, SEC.30; P.L.56-2020, SEC.13.