Utah Code § 75B-1-303 — Utah Code / Title 75B / Chapter 75B-1 / § 75B-1-303
§ 75B-1-303. Requirements for asset protection trust.
Status: in_force

(1) For the protections described in Subsection 75B-1-302(1) to apply to an asset protection trust, the asset protection trust shall comply with this section. (2) (a) The trust instrument shall: (i) provide that the trust is governed by Utah law and is established in accordance with this part; (ii) require that at all times at least one trustee be a Utah resident or Utah trust company; (iii) provide that the settlor, as a beneficiary, may not voluntarily or involuntarily transfer: (A) the income or principal of the asset protection trust; or (B) any other beneficial interest of the settlor; (iv) require that the trustee notify in writing every person who has a domestic support obligation against the settlor at least 30 days before paying and delivering any distribution to the settlor as a beneficiary; and (v) require that the notice described in Subsection (2)(a)(iv) state the date that the distribution will be paid and delivered and the amount of the distribution. (b) The provision described in Subsection (2)(a)(iii) is considered a restriction on the transfer of the settlor's beneficial interest in the asset protection trust that is enforceable under applicable nonbankruptcy law within the meaning of 11 U.S.C. Sec. 541(c)(2). (c) (i) If the trustee does not send the notice required under Subsections (2)(a)(iv) and (v), the court may authorize any person with a domestic support obligation against the settlor to whom notice was not sent to attach the distribution or future distributions. (ii) Notwithstanding Subsection (2)(c)(i), the person described in Subsection (2)(c)(i) may not: (A) satisfy a claim or liability in either law or equity out of the settlor's transfer to the trust or the settlor's beneficial interest in the trust; or (B) force or require the trustee to make a distribution to the settlor as a beneficiary. (d) This Subsection (2) does not require particular language to be used in the trust instrument if the meaning of the trust provision otherwise complies with this section. (3) The settlor may not have the ability under the trust instrument, without the consent of a person who has a substantial beneficial interest in the trust and whose interest would be adversely affected by the exercise of the power held by the settlor: (a) to revoke, amend, or terminate all or any part of the trust; or (b) to withdraw any property from the trust, except that the settlor, without the approval or consent of any person, may be given the power under the trust instrument to substitute assets of substantially equivalent value. (4) Except as provided in Subsections 75B-1-304(5)(c) and (6), the trust instrument may not provide for any mandatory distributions of either income or principal to the settlor, as a beneficiary. (5) (a) At the time the settlor transfers any assets to the asset protection trust, the settlor may not: (i) be in default of making a payment due under a domestic support obligation; or (ii) intend to hinder, delay, or defraud a known creditor by transferring the assets to the trust. (b) A settlor's expressed intention to protect assets in the asset protection trust from the settlor's potential future creditors is not evidence of an intent to hinder, delay, or defraud a known creditor under Subsection (5)(a)(ii). (6) A transfer of assets to the asset protection trust may not: (a) render the settlor insolvent; or (b) be derived from unlawful activities. (7) A creditor of the settlor has the burden of proving that the requirement in Subsection (5)(a)(ii) or (6)(a) is not satisfied by clear and convincing evidence. (8) (a) If an asset protection trust does not comply with a requirement described in Subsection (2)(a)(i), (2)(a)(ii), (2)(a)(iii), (3), or (4), none of the property held in the asset protection trust will at any time have the benefit of the protections described in Subsection 75B-1-302(1). (b) If a transfer of assets to an asset protection trust does not comply with the requirement described in Subsection (5)(a)(i), the property transferred to the asset protection trust that does not comply with the requirement does not have the benefit of the protections described in Subsection 75B-1-302(1) with respect to any person with the domestic support obligation. (c) If a transfer of assets to an asset protection trust does not comply with the requirement described in Subsection (5)(a)(ii) or (6), the property transferred to the trust that does not satisfy the requirement may not have the benefit of the protections described in Subsection 75B-1-302(1).