A soils engineer moved his real property into a Nevada trust four years before he was sued. A California court unwound it anyway under California’s fraudulent transfer statute — and his argument that Nevada law authorized the transfer failed, because Nevada has enacted the same statute.
⚠️ A note before anything else. Kilker v. Stillman, No. G045813, 2012 Cal. App. Unpub. LEXIS 8542 (Cal. Ct. App., 4th Dist., Div. Three, Nov. 26, 2012), is an unpublished opinion. California Rule of Court 8.1115(a) prohibits courts and parties from citing or relying on it. I am writing about it because the reasoning is instructive, not because it is authority. Anyone presenting it as precedent is misrepresenting what it is.
Key Points
- Timing did not save him. The transfer came four years before the claim, and the court still unwound it.
- ⚠️ The Nevada argument failed. Nevada has adopted the same UFTA, so choosing Nevada changed nothing.
- “Reasonably foreseeable” future creditors count. No claim had to exist at the time of transfer.
- Retained control and no consideration supplied the intent finding — not the testimony alone.
- The court had a second, independent ground: alter ego.
- It is unpublished. Which is its own lesson.
What Happened
Frank Stillman was a soils engineer. In 2000 he provided services in connection with the construction of a swimming pool for Terence and Paula Kilker.
In 2004 he transferred real property — referred to in the opinion as the Railroad Street property — to the Walla Walla Group Trust, formed under Nevada law.
In 2008 the pool failed. The Kilkers sued in negligence and obtained a judgment against Stillman for $92,500.
They levied on the Railroad Street property. A day or two before the scheduled sheriff’s sale, the trust’s successor trustee filed a third party claim asserting that Stillman had conveyed the property years earlier. The Kilkers petitioned the court to invalidate that claim.
After a bench trial, the court found the third party claim invalid. The Court of Appeal affirmed.
★ The Nevada Argument, and Why It Lost
This is the part of the case worth knowing, and it is usually left out of the summaries.
On appeal, Stillman argued that the trust was formed under Nevada law, which authorized the transfer, and that his “reasonable belief” that he was “engaging in lawful asset protection” negated the intent required for a fraudulent transfer.
The court decided the case under California’s UFTA, Civil Code §3439.04(a). It answered the Nevada argument with Nevada’s own statute.
Nevada “has also enacted the UFTA (Nev. Rev. Stat., § 112.140 et seq.) ‘to further the substantive social policy of assuring that the efforts of judgment creditors and others to satisfy their claims will not be defeated by fraudulent transfers.’”
Sit with what that does to the usual pitch. The entire appeal of a domestic asset protection trust is that a favorable state has written rules protecting the transfer. But every DAPT state has also adopted the Uniform Fraudulent Transfer Act, and the UFTA was written for exactly the purpose of stopping transfers that defeat creditors.
So the favorable statute and the unfavorable statute live in the same code. Choosing Nevada did not import a shield. It imported both halves.
Why Four Years of Lead Time Did Not Help
The transfer happened in 2004. The pool failed in 2008. No claim existed when the property moved.
That is normally the strongest fact a defendant can have. It was not enough here.
“The court found the Kilkers were reasonably foreseeable as future judgment creditors under the UFTA.”
And the reason they were foreseeable came out of Stillman’s own mouth. He testified he transferred the property because soils engineers are frequently sued.
That testimony did two things at once. It explained why he planned. And it established that he knew claims were coming from somewhere — which is what made a future claimant foreseeable.
But the testimony was not the whole finding
This gets misreported, and the distinction matters. The court did not hold that saying “asset protection” out loud is fatal. It identified three facts supporting intent under Civil Code §3439.04(b):
- He retained control of the property.
- He transferred assets to the trust.
- He received no consideration for the transfers.
Retained control is the one doing the work, and it is the same finding that decided Anderson and Lawrence. The testimony supplied motive. Control supplied the case.
The Second Ground Most People Miss
The court did not rest on fraudulent transfer alone. It also found the third party claim invalid “based on the alter ego theory that Stillman was the equitable owner” of the trust.
That is an independent path to the same place, and it does not depend on timing at all. A fraudulent transfer claim has a look-back period. An alter ego finding does not.
Which is why a structure that survives the transfer analysis can still fail if the person who funded it never actually let go.
⚠️ What This Case Is, and What It Is Not
It is not precedent. It is unpublished and uncitable in California. The $92,500 judgment makes it a small case, and the reasoning was never certified for publication.
What it is, is a record of how a California court approached the question when it had a DAPT in front of it — and a demonstration that the Nevada statute did not travel the way the planning assumed.
Read it as a warning about posture, not as a rule. For the actual rule in California, the authority is Probate Code §15304, which voids the spendthrift restraint as against the settlor’s own creditors, and the published decisions applying it.
What I Take From It
Build before the exposure is foreseeable, not merely before the claim exists. Stillman had four clean years and lost anyway, because the court asked whether creditors of his kind were predictable rather than whether one had already appeared.
And understand what a domestic statute can and cannot do. A DAPT state’s protective statute sits alongside that state’s fraudulent transfer act, so choosing that state never takes a transfer outside fraudulent transfer law. There is no version of a domestic structure where only the helpful half of the code shows up.
I spent the early part of my career on the plaintiff’s side of civil litigation. The structures that came apart came apart for the same two reasons every time: the debtor still controlled what he claimed to have given away, or he built it after the claim was already in view.
Stillman did the first one.
Structure before stress.
📞 For a confidential legal consultation, contact Bradley Legal Corp. at (888) 773-9399, or complete the intake questionnaire at btblegal.com.
By: Brian T. Bradley, Esq. — National Asset Protection Attorney
Case Reference
Kilker v. Stillman, No. G045813, 2012 Cal. App. Unpub. LEXIS 8542 (Cal. Ct. App., 4th Dist., Div. Three, Nov. 26, 2012) (Fybel, J.) (unpublished — not citable under Cal. Rules of Court, rule 8.1115(a)). Cal. Civ. Code §3439.04(a), (b); Nev. Rev. Stat. §112.140 et seq.
A later appeal in the same litigation, Kilker v. Stillman, 233 Cal. App. 4th 320 (2015), is a published decision on an unrelated question — whether Social Security payments in a bank account were exempt from levy under 42 U.S.C. §407. It should not be confused with the 2012 decision discussed here.
This article is general legal information, not legal advice, and reading it does not create an attorney-client relationship. It describes a decision on its own facts and record. Consult a licensed attorney about your circumstances.
