Case Summary:
The trustee sought to recover a transfer as constructively fraudulent under § 548. The debtor transferred money to her daughter about 11 months before the bankruptcy. She withdrew the funds from a 401(k) account and placed them into her personal account prior to the transfer. The funds were intended to help the daughter buy a mobile home. The transfer was essentially a gift and the debtor received only intangible, emotional satisfaction in exchange for the funds. Further, even if the money did not lose its exempt character once it was removed from the 401(k) account, the debtor voluntarily transferred the funds to the daughter. Once the transfer is avoided by the trustee and the property is returned to the bankruptcy estate, the debtor is precluded from asserting an exemption in such assets under § 522(g)(1). Judgment was entered in the trustee’s favor.
Statute/Rule References:
11 U.S.C. § 548 -- Fraudulent Conveyance
Key Terms:
Fraudulent Conveyance