My estate plan involves transferring assets to avoid insolvency claims. Can this be set aside?

What the Law Says

EU law does not establish a single harmonised insolvency regime, but Directive (EU) 2019/1023 on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures sets minimum standards. National laws implementing this Directive — and pre-existing national insolvency laws — govern avoidance actions against suspect asset transfers.

Under Article 15 of Directive (EU) 2019/1023, Member States must ensure that transactions detrimental to creditors — including gifts, undervalue transfers, or preferential payments — may be challenged in insolvency proceedings. The Directive requires that such actions be available where the debtor was insolvent or became insolvent as a result of the transaction.

The look-back period is determined nationally but must comply with the Directive’s minimum safeguards. Most EU Member States apply a standard period of two years before the opening of insolvency proceedings — during which suspicious transactions may be reviewed and annulled.

A transfer may be voidable even without proof of fraudulent intent if it occurred for no consideration (e.g., a gift) or significantly less than market value, and the debtor was already insolvent or rendered insolvent by the act.

Statutory Text

Member States shall ensure that, where insolvency proceedings have been opened, the insolvency practitioner may challenge legal acts which are detrimental to the general body of creditors and which the debtor has carried out before the opening of insolvency proceedings.

— Directive (EU) 2019/1023, Art. 15(1) — Challenge of detrimental acts

Statutory Text

Member States shall ensure that the time limit for challenging such acts starts to run from the date of the opening of insolvency proceedings and covers at least the period of two years prior to that date.

— Directive (EU) 2019/1023, Art. 15(3) — Time limits

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