In Re Costas
Gaughan v. Edward Dittlof Revocable Trust (In Re Costas)
Opinion
Opinion
Mills, J.
The Bankruptcy Code’s federal fraudulent conveyance provision allows a trustee to avoid “any transfer ... of an interest of the debtor in property” within a two year reach back period where the transfer was actually or constructively fraudulent. 11 U.S.C. § 548 (a)(1). The question in this case is whether an Arizona disclaimer qualifies as a “transfer ... of an interest of the debtor in property.” Because we answer this question in the negative, the Bankruptcy Appellate Panel’s refusal to avoid the disclaimer under § 548 is affirmed.
I. FACTS
On October 18, 2001, Edward P. Dittlof (“Dittlof’) created the Edward Dittlof Revocable Trust (“Trust”) under Arizona law. The Trust provided that upon Dittlofs death, the Trust property would be distrib uted to several of Dittlof s children, including Rachelle Costas (“Costas”). Should a beneficiary die prior to distribution, the beneficiary’s children would take the share.
Dittlof died on February 25, 2002, leaving Costas an interest worth at least $34,800. Costas, however, refused to accept it and, on November 7, 2002, executed a disclaimer under Arizona law to relinquish her claims to the Trust property.