APP Litigation and Creditor Protection Strategies 1

Question 1

What is the primary legal purpose of asset protection planning?

Accepted Answer

To lawfully structure assets so they are less accessible to future creditors

Answer

Asset protection planning legally structures assets before claims arise to make them less accessible to future creditors, not to defraud existing ones.

Question 2

Which legal doctrine allows courts to set aside transfers made to defraud creditors?

Accepted Answer

Fraudulent conveyance

Answer

The fraudulent conveyance doctrine enables courts to void transfers made with the intent to hinder, delay, or defraud creditors.

Question 3

A 'charging order' against an LLC membership interest typically does what for a creditor?

Accepted Answer

Limits the creditor to receiving distributions if and when they are made

Answer

A charging order is the exclusive remedy in most states; it only entitles a creditor to receive distributions actually made to the debtor-member, not to control the LLC.

Question 4

Under the Uniform Voidable Transactions Act (UVTA), what is the standard look-back period for transfers made with actual intent to defraud?

Accepted Answer

4 years

Answer

The UVTA generally provides a 4-year statute of limitations (or 1 year after discovery) for claims involving actual fraudulent intent.

Question 5

Which of the following assets is typically exempt from creditor claims under most U.S. state laws?

Accepted Answer

Qualified retirement plan assets (e.g., 401(k))

Answer

ERISA-qualified retirement plans such as 401(k)s are broadly protected from creditors under both federal and most state laws.

APP - Asset Protection Professional Certification Practice Test

APP - Asset Protection Professional Certification Practice Test

APP Litigation and Creditor Protection Strategies 1