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Author: McCullough

Lakeside Lumber Products v. Evans

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Using Marital Property Agreements for Asset Protection

Lakeside Lumber Products, Inc v. Renee Evans, Dan R. Evans, et al.,

2005 UT App 87 (Utah App. 02/25/2005)

COURT OF APPEALS OF UTAH

2005 UT App 87;2005 Utah App. LEXIS 71

Case No. 20010334-CA

Appeal from Second District, Farmington Department. The Honorable Jon M. Memmott.

Affirmed.

COUNSEL: Clinton J. Bullock, J. Jay Bullock, and Karen Bullock Kreeck, Salt Lake City, for Appellant.

Loren D. Martin, Salt Lake City, for Appellee.

JUDGES: Before Judges Billings, Bench, and Thorne.

OPINION: BENCH, Associate Presiding Judge:

Lakeside Lumber Products, Inc. (Lakeside) appeals the district court’s grant of summary judgment in favor of Dan R. and Renee Evans. We affirm.

 

BACKGROUND

In 1996, Dan Evans, in his capacity as manager of a limited liability company, E.S. Systems, executed a personal guarantee agreement in favor of Lakeside. Lakeside delivered goods to E.S. Systems, but E.S. Systems and Dan Evans failed to pay for the goods. In 1998, E.S. Systems filed for bankruptcy. Later that same year, Lakeside obtained a judgment against Dan Evans in Arizona. Dan Evans filed a petition for bankruptcy in 1999.

Lakeside brought the present action against Dan and Renee Evans in 1998, seeking to satisfy the Arizona judgment by obtaining an interest in the couple’s primary residence. Dan and Renee Evans had transferred the home to an intervivos trust several years earlier. In 1989, Dan and Renee Evans executed the DaRe Family Trust Agreement, which created three separate trusts: the DaRe Trust, the Daymond Trust, and the Revans Trust. The Evanses conveyed the home to the Revans Trust. Article II of the DaRe Family Trust Agreement, which outlines the terms of the Revans Trust, states that: “Property held as ‘The Revans Trust’ is the exclusive property of Renee Poulsen Evans and Daniel Raymond Evans hereby expressly waives all interests . . . therein.” Dan and Renee Evans were joint trustees under the DaRe Family Trust Agreement.

The DaRe Family Trust Agreement was amended in 1997. As part of the amendment process, Dan and Renee Evans executed a separate trust agreement for the Revans Trust, naming Renee Evans as the sole trustee. In addition, the couple filed a quitclaim deed as trustees, purporting to reconvey the home to the Revans Trust. The stated purpose of the quitclaim deed was “to reflect that Daniel R. Evans . . . no longer serves as a trustee.”

Lakeside’s complaint alleged that either the initial transfer to the trust or the subsequent amendment constituted a fraudulent transfer. Alternatively, Lakeside asked the district court to create a constructive trust in Lakeside’s favor because, in Lakeside’s view, Dan Evans continues to hold an interest in the home as a beneficiary and still has power to revoke the transfer under the Revans Trust.

After suit was filed, Dan and Renee Evans moved for summary judgment and Lakeside filed a cross-motion for summary judgment. In granting summary judgment in favor of Dan and Renee Evans, the district court concluded that the undisputed facts did not demonstrate that Dan Evans transferred the home to the trust with the intent to defraud his creditors. Further, the district court determined that the 1997 amendment to the trust agreement was not a transfer, but merely an addition to the trust agreement. With regard to the constructive trust claim, the district court held that the trust agreement did not give Dan Evans the power to revoke the transfer of the home. The district court stated that Dan Evans was a beneficiary of the Revans Trust, but refused to create a constructive trust in Lakeside’s favor. Lakeside appeals.

 

ISSUES AND STANDARDS OF REVIEW

Lakeside argues that the district court erred in rejecting its claims for fraudulent transfer and constructive trust, and in granting the Evanses’ motion for summary judgment.

“In reviewing a grant of summary judgment, we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party.” Higgins v. Salt Lake County, 855 P.2d 231, 233 (Utah 1993). Summary judgment is proper when “there is no genuine issue as to any material fact” and “the moving party is entitled to a judgment as a matter of law.” Utah R. Civ. P. 56(c). Moreover, a district court’s interpretation of a “trust instrument is a question of law,” which we review for correctness. Jeffs v. Stubbs, 970 P.2d 1234, 1251 (Utah 1998).

 

ANALYSIS

I. Fraudulent Transfer

A. The 1989 Conveyance

Lakeside argues that the district court erred in concluding that the 1989 conveyance of the home to the trust was not fraudulent as a matter of law. Under the Uniform Fraudulent Transfer Act (the Act), the transfer of an asset “is fraudulent . . . if the debtor made the transfer . . . with actual intent to hinder, delay, or defraud any creditor.” Utah Code Ann. § 25-6-5(1) (1998). The existence of “fraudulent intent is ordinarily considered a question of fact, and may be inferred from the existence of certain indicia of fraud” enumerated in the Act. Territorial Sav. & Loan Ass’n v. Baird, 781 P.2d 452, 462 (Utah Ct. App. 1989) (citations and quotations omitted). Indicia of fraud “are facts having a tendency to show the existence of fraud, although their value as evidence is relative not absolute.” Id. (citations and quotations omitted). Under the Act, indicia of fraudulent intent include: “transfer . . . to an insider,” and “the debtor retaining possession or control of the property.” Utah Code Ann. § 25-6-5(2)(a), (b). Moreover, the Act provides that the enumerated indicia of fraud are to be considered “among other factors” in determining actual intent. Id. § 25-6-5(2).

With regard to the 1989 conveyance, Lakeside argues that two indicia of fraud are present: (1) Dan Evans transferred the home to an “insider”; and (2) Dan Evans has continued to reside in the home, effectively retaining control of the property. Assuming, without deciding, that Lakeside’s contentions are true, we conclude that these indicia of fraud, considered in conjunction with “other factors,” fail to create a triable issue of fact in this case. Crucial to our determination is the temporal remoteness of the 1989 conveyance to both the 1996 guarantee agreement and Dan Evans’s 1999 petition for bankruptcy. Lakeside has pointed to no facts suggesting that in 1989, or shortly thereafter, Dan Evans was insolvent or experiencing other financial difficulties. Likewise, there are no facts in the record that would suggest that the 1989 transfer was part of a larger scheme to defraud future creditors such as Lakeside. Based merely on the indicia of fraud cited by Lakeside–transfer to an insider and retaining control of the transferred property–a jury could not rationally conclude that Dan Evans transferred the property with an intent to defraud creditors.

Thus, the district court did not err in granting summary judgment on this issue.

8. The 1997 Trust Amendment

Lakeside contests the district court’s conclusion that the 1997 amendment to the trust was not a transfer, but simply a modification of the trust agreement. Under the Act, a transfer is defined as “every mode . . . of disposing of or parting with an asset or an interest in an asset.” Utah Code Ann. § 25-6-2(12) (1998).

At the time of their creation, the DaRe Trust, the Daymond Trust, and the Revans Trust were governed by a single trust agreement, entitled “the DaRe Family Trust.” Under the 1989 trust agreement, Dan and Renee Evans were both trustees of the Revans Trust. In 1997, the trust agreement was amended and a separate agreement for the Revans Trust was created. At that time, Dan and Renee Evans, as trustees, executed a quitclaim deed to the Revans Trust and named Renee Evans as the sole trustee.

 

We conclude that these actions did not effectuate a transfer within the meaning of section 25-6-2(12). Dan Evans did not part with an asset or an interest in an asset by signing the quitclaim deed as a trustee. The purpose of the amendment and the quitclaim deed was to reflect Dan Evans’s resignation as trustee. The district court did not err in determining that the 1997 amendment was not a transfer. Thus, the district court properly granted summary judgment in favor of Dan and Renee Evans on Lakeside’s fraudulent transfer claim.

II. Constructive Trust

Lakeside argues that the undisputed material facts justified the creation of a constructive trust in Lakeside’s favor. “A constructive trust is an equitable remedy which arises by operation of law to prevent unjust enrichment.” Ashton v. Ashton, 733 P.2d 147, 150 (Utah 1987). “The plaintiff in bringing a suit to enforce a constructive trust seeks to recover specific property.” Restatement of Restitution § 160 cmt. a (1937). Because Lakeside is seeking to recover specific property, Lakeside must show a nexus between the alleged wrongful conduct and the property that is the target of the constructive trust action. See Baltimore & Ohio R.R. Co. v. Equitable Bank, 77 Md. App. 320, 550 A.2d 407, 412 (Md. Ct. Spec. App. 1988) (“In order to impose a constructive trust as a matter of law specific funds must be ascertained as traceable to fraudulent or wrongful conduct.”); Restatement of Restitution § 160 cmt. b (“A constructive trust is imposed [*9] because the person holding title would profit by a wrong or would be unjustly enriched if he were allowed to keep the property.”); 76 Am. Jur. 2d Trusts § 207 (1992) (noting that imposition of a constructive trust requires that “specific identifiable property” be held by the defendant).

Lakeside contends that a constructive trust is an appropriate remedy because Dan Evans is either a beneficiary of the Revans Trust or has power to revoke the transfer of the home. However, even assuming these facts, a constructive trust can only be imposed if Lakeside can demonstrate a connection between wrongful conduct and the property. See Baltimore & Ohio R.R. Co., 550 A.2d at 412.

Lakeside argues that it can prevail on its constructive trust claim without a showing of wrongful conduct. Lakeside points to section 156 of the Restatement of Trusts, which provides that “where a person creates for his own benefit a trust[,] . . . creditors can reach his interest.” Restatement (Second) of Trusts § 156 (1959). The Restatement further provides that the creditor can reach the assets of a self-settled trust without showing fraudulent intent. See id., comment a. However, section 156 cannot be read to allow a creditor to reach assets of a self-settled trust under any theory of recovery, even where, as here, the theory urged by the creditor requires a showing of fraudulent or wrongful conduct. Section 156 merely states a general rule: A debtor’s interest in a self-settled trust is reachable to the same extent as the debtor’s non trust assets. Moreover, comment (a) of section 156 simply recognizes it is possible for a creditor to successfully reach self-settled trust assets without showing fraudulent intent, if the creditor pleads a proper theory of recovery. See Leach v. Anderson, 535 P.2d 1241, 1243 (Utah 1975) (citing the general rule that self-settled trusts are void against creditors and allowing a creditor to reach the assets of a self-settled trust under a statute that did not require a showing of fraudulent intent). Comment (a) does not suggest that a creditor’s obligation to prove all required elements of an established cause of action is altered when the creditor seeks to reach the assets of a self-settled trust. Thus, Lakeside cannot avoid its obligation to prove each element of its constructive trust claim simply by citing the Restatement of Trusts. If Lakeside desired to recover without having to prove fraudulent or wrongful conduct, it was incumbent upon Lakeside to plead such a theory.

Lakeside also cites Butler v. Wilkinson, 740 P.2d 1244 (Utah 1987), for the proposition that a judgment creditor can reach a debtor’s property via a constructive trust action. However, Butler is easily distinguished from the present case. In Butler, the Utah Supreme Court held that a constructive trust was necessary to permit judgment creditors to reach the proceeds resulting from a debtor’s fraudulent transfer where the judgment creditors had no other remedy. See id. at 1262.

In contrast to Butler, the present case does not involve a fraudulent transfer or other wrongful conduct. The debtor’s fraudulent transfer in Butler gave rise to the constructive trust; without the fraudulent transfer, a constructive trust would have been inappropriate. See id. Here, even if Dan Evans holds an interest in the Revans Trust, as Lakeside asserts, this fact alone does not give rise to a constructive trust in Lakeside’s favor absent a showing of fraud or other wrongdoing. While it is true that Dan Evans has failed to pay his debt to Lakeside, it does not follow that Lakeside can collect on the debt by imposing a constructive trust on the home. Thus, we affirm the district court’s conclusion that, as a matter of law, Lakeside cannot prevail on its constructive trust claim.

CONCLUSION

Accordingly, we affirm the district court’s order granting summary judgment in favor of Dan and Renee Evans and denying Lakeside’s cross-motion for summary judgment.

Russell W. Bench, Associate Presiding Judge

 

WE CONCUR:

Judith M. Billings,Presiding Judge

William A. Thorne Jr., Judge

Why You Can’t Rely on a Wyoming LLC for Asset Protection Purposes

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For many years, asset protection planners have believed and promoted the idea that an out-of-state resident could take advantage of the strong charging order laws in another state by filing their LLC in another state.  Recent cases show that this does not work.

In American Institutional Partners, LLC v. Fairstar Resources, Ltd., 2011 WL 1230074 (D.Del., Mar. 31, 2011), a Utah resident established several Delaware LLCs with the hope that they could take advantage of the better charging order statute in the State of Delaware. When the Utah resident was sued in a state court in Utah, the Utah court stated “that Utah law applies to all execution proceedings in this matter, including the foreclosure of a member’s interest in a limited liability [company], whether such company is domestic or foreign.” In other words, the Utah court used their own law and ignored the law of the state where the LLC was filed.

This means that you shouldn’t believe those who heavily advertise the use of a Wyoming LLC for asset protection purposes, because if you are sued in a state outside of Wyoming, the court will probably use their own law and you won’t get the benefits of a Wyoming LLC.

Mortensen Case Holds that Self-Settled Trusts Don’t Work in Bankruptcy (but Our Trust Will)

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A self-settled trust is a trust in which the grantor is also included as a beneficiary.  Historically, all fifty states did not allow asset protection for a self-settled trust.
  In recent years, several states have passed laws allowing asset protection for a self-settled trust.  These states include Alaska, Nevada, Delaware, Tennessee, Utah, Hawaii, Missouri, New Hampshire, Oklahoma, Rhode Island, Wyoming and South Dakota.  Many have promoted self-settled trusts under the name of a “Domestic Asset Protection Trust,”an “Alaska Asset Protection Trust,” a “Nevada Asset Protection Trust,” etc.  As more and more cases show that offshore trusts can be attacked through the use of a contempt order, these “Domestic Asset Protection Trusts have become quite popular.However, a recent bankrupcty case (Battley v. Mortensen, Adv. D. Alaska, No. A09-90036-DMD, May 26, 2011) shows that self-settled asset protection trusts are ineffective at protecting assets from bankruptcy.  This is not a situation where bad facts make bad law.  This is a case where the debtor settled the trust when he was not insolvent, and it was done four years before the debtor filed for bankruptcy.The reason the self-settled asset protection trust failed is because of a new bankruptcy law (Section 548(e)(1)) which specifically applies to a self-settled trust.  This law allows the bankruptcy court to avoid any transfer made to a self-settled trust within ten years of the bankruptcy filing if the debtor made the transfer with actual intent to hinder, delay, or defraud any entity to which the debtor became indebted whether the debt occured before or after the transfer.It is important to note that the Mortensen case and Section 548(e)(1) have no affect on any trust in which the debtor is not a beneficiary; they only apply to self-settled trusts.  Thus, our trust continues to be the best asset protection trust available in or out of the US because it is supported by the federal bankruptcy code (See Section 541(b)(1)), the Uniform Trust Code (See Section 505), the Restatements of the Law (See RESTATEMENT (SECOND) OF TRUSTS Section 156(2)), and many statutes and court cases throughout the country.Click HERE to read the case.

Asset Protection Test Case

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I had a client named Bill who was a wealthy physician.  In 2003, he created a 541 Trust® for his wife Jenny and their four children.

  He put $2,000,000 into the 541 Trust® where it was invested in income producing real estate.  In 2005, Bill died.  In 2007, Jenny married a successful real estate developer named Paul.  Paul needed a loan for a large project and the bank required both Paul and Jenny to guarantee the loan.  When the real estate market crashed in 2008 and 2009, the project failed.  The bank sued Paul and Jenny on their personal guaranty.  Paul and Jenny were both forced into bankruptcy.  The bankruptcy court declared that the 541 Trust® was not includible in the bankruptcy estate and that the creditors have no claim on the 541 Trust®.  The 541 Trust® is now Jenny’s only source of income.  The income and principal of the 541 Trust® is available to Jenny, but protected from her creditors or from a divorce.  When Jenny dies, the assets will be held for her children for life and they will receive the same asset protection.

Asset Protection for Doctors

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Doctors have several unique characteristics that require specialized asset protection planning.  First, doctors cannot take advantage of the corporate shield that protects other business owners from the liabilities of their business.  In all fifty states, doctors are personally liable for malpractice claims regardless of whether their practice is operated within a corporation.   Second, malpractice insurance for many doctors is prohibitively expensive.  Many doctors choose to underinsure or even go without malpractice insurance due to the outrageous expense.  Third, a doctor’s most valuable assets often consist of accounts receivable and future earnings which are more difficult to protect than a current asset.
Because doctors have unique needs, they need a unique solution.  The best solution for a doctor consists of the following entities: (1) a professional corporation (taxed as an S corporation) to operate the medical practice, (2) a 541 Trust® to remove assets from the doctor’s personal ownership, (3) a Delaware LLC that is owned by the 541 Trust to own cash and other investments, and (4) an effective equity stripping plan that allows the Delaware LLC to put an enforceable lien on the doctor’s home, accounts receivable and other assets which are personally held by the doctor.  If you would like a diagram and detailed explanation of this plan, send me an email at  lee@lsmlaw.net.
The purpose of the professional corporation is to save money on employment taxes and keep the employees and other non-malpractice liabilities separate from the doctor and his assets.  The purpose of the 541 Trust is to remove assets from the doctor’s personal ownership so they cannot be discovered or attached in a lawsuit or other legal proceeding.  The purpose of the Delaware LLC is to own and manage cash or other liquid assets. The purpose of the equity stripping plan is to ensure that the doctor’s home and accounts receivable cannot be attached by a third party.
This plan is simple to implement, easy to maintain, and impervious to attack if it is implemented in advance of a problem.  However, individual circumstances require individual plan design and this site should not be construed to create an attorney-client relationship or provide legal advice for any particular situation.  If you would like to discuss your situation, please give me a call.

Update of Recent Asset Protection Cases

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This is a summary of important findings from recent asset protection cases:

1. In re Baldwin, 593 F.3d 1155 (10th Cir Ct. App. 2010). Bankruptcy trustee can avoid restrictions imposed by state law charging order statutes if a partnership agreement is not an executory contract. Also see In re Ehmann 2005 WL 78921 (Bankr.D.Ariz. 01/13/2005) which had similar facts and a similar holding.

From these cases we learn the following: (1) Partnership agreements and LLC operating agreements should be carefully designed to ensure that they constitute executory contracts, (2) Personal use assets should not be held by business entities (except for valid lease arrangements), (3) Entities should be structured for valid business purposes, (4) If possible, entities should include legitimate partners other than the debtors (and unrelated to the debtors if possible).

2. Shaun Olmstead vs. Federal Trade Commission, No. SC08-1009, June 24, 2010.  The Supreme Court of Florida held that Florida law permits a court to order a judgment debtor to surrender all right, title, and interest in the debtor‘s single-member limited liability company to satisfy an outstanding judgment. A charging order is not the sole remedy authorized by law.

From this case we learn the following: (1) Some states provide much better asset protection than others for LLCs and limited partnerships. Many states, including Florida, mention a charging order as one remedy but remain silent as to whether it is the sole remedy of a creditor. This case shows that this language is insufficient to ensure “charging order protection.” (2) As we have learned from previous cases, including In re Albright, 291 B.R. 538, 540 (D. Colo. 2003), you cannot rely on a single member LLC to provide charging order protection. This does NOT mean that a single member LLC cannot provide asset protection to the members against the inside liabilities of the LLC.

3. Miller v. Kresser, 2010 Fla. App Lexis 6152 (Fla. 4th DCA 2010); Wachovia Bank, NA v. Levin, 419 B.R. 297 (E.D.N.C. 2009) and In re: Coumbe, 304 B.R. 378 (2004). From these cases we learn that the good old fashioned asset protection provided by a spendthrift trust continues to be upheld by the courts. This protection is even greater when the trust is designed as a discretionary trust (see Wilson v. U.S., 140 B.R. 400 (N.D. Tex. 1992). Once again, this protection is even greater when supported by a state statute that provides that a beneficial interest is not a property right and that the discretion of a trustee is “absolute.”

4. Sweeney, Cohn, Stahl & Vaccaro v. Kane, No. 2002-04052 (N.Y. App.Div. 03/08/2004).  A New York resident attempted to protect a residence by placing it in a Florida corporation whose shares were owned as tenants by the entirety under Florida law.  The Supreme Court of the State of New York- Appellate Division, found that Florida law applied because the state of incorporation has the greatest interest in determining whether the corporate veil may be pierced.  The court allowed the creditor to attach the residence under a theory of “reverse-veil piercing.”

This case affirms the fact that the internal affairs of a corporation, including a potential piercing of the corporate veil, are governed by the laws of the state where the corporation is filed, regardless of the fact that the plaintiffs, the defendants, and the cause of action in the case, were all located in another state.  The case also reminds us not to put personal use assets in a corporate entity without a lease or other business purpose to justify such an arrangement.

Historic Opportunity

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In Revenue Ruling 2010-18, the IRS published the applicable federal interest rates for July, 2010. These are some of the lowest rates in the past thirty years, and as far as I can see,some of the lowest rates in modern history. For example, you can sell assets in July in exchange for a promissory note with athree year termand an interest rate of 0.61%. Or, you can sell assets in July in exchange for a promissory note with a nine year term and an interest rate of 2.33%. Or, if you have previously sold assets to a trust for estate planning purposes, you could re-finance the note at these historically low interest rates. These low rates allow more of your assets to grow outside of your estate and pass to thenext generation free of estate taxes.

In Revenue Ruling 2010-18, the IRS published the applicable federal interest rates for July, 2010. These are some of the lowest rates in the past thirty years, and as far as I can see,some of the lowest rates in modern history. For example, you can sell assets in July in exchange for a promissory note with athree year termand an interest rate of 0.61%. Or, you can sell assets in July in exchange for a promissory note with a nine year term and an interest rate of 2.33%. Or, if you have previously sold assets to a trust for estate planning purposes, you could re-finance the note at these historically low interest rates. These low rates allow more of your assets to grow outside of your estate and pass to thenext generation free of estate taxes.

At least three factors create an ideal environment for entering into an estate planning transaction:

(1) low interest rates, (2) relatively low values in real estate, stock, and other markets, and (3) the likelihood of future inflation. I believe that all three of these factors are in place at the present time, making this possibly the best time ever to enter into an estate planning transfer.

It is true that the estate tax laws are in a state of uncertainty. At the present time, no one knows whether theestate tax exemption will be $1,000,000 per person or $5,000,000 per person in 2011. In my opinion, if you have an estate in excess of $2,000,000, the best course is to planto avoid the estate tax even if the exemption is only $1,000,000 per person, and make your plans flexible enoughso that you can adapt toany changes in the law.

By taking advantage of today’s low interest rates and low market values, you will have greater peaceof mind,you will have more optionsto allow you to adjust to future conditions, and you will potentially save millions in estate taxes.

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Miller v. Kresser

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In the recent case, Miller v. Kresser, 2010 Fla. App Lexis 6152 (Fla. 4th DCA 2010), a Florida Appeals court overturned the ruling of a lower court which allowed a creditor to reach the assets of a trust.

The lower court allowed the creditor to reach the assets of the trust because the beneficiary exerted significant control over the trust, the trustee was related to the beneficiary, and the trustee basically failed to perform the administrative duties expected of a trustee. The appeals court overturned that ruling and upheld the asset protection provided by the trust despite the fact that the trustee was not fulfilling his duties.

Lessons learned from this case:

1. Courts continue to uphold the asset protection provided by a spendthrift trust, even in cases where the operation of the trust is imperfect.

2. You can improve your chances of protecting trust assets by appointing an independent professional as the trustee instead of appointing a family member.

3. If you must appoint a family member as a trustee, appoint an independent professional as a co-trustee in order to add legitimacy to the trust.

4. A trustee who does very little administration and allows the beneficiary too much control over the trust will jeopardize the asset protection provided by the trust. The trustee should keep books and records, participate in regular meetings, make investment decisions, sign tax returns, and take part in the administration of the trust.

5. Distribution of income and principal should not be mandatory at any time, but should be left to the unfettered discretion of the trustee.

6. The trust should be located in a jurisdiction that supports the asset protection provided by an irrevocable spendthrift trust.

Death Hollow Done Right

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As a sequel to my previous blog entry, I wanted to provide a report of our recent trip to Death Hollow.

The first day entails a 13 mile hike in soft desert sand without any water. Last time we did this hike we almost died of dehydration. This time we left at 3am and used headlamps to light our way. Not only did we enjoy the adventure of hiking through the desert at night, we arrived at our destination early, with plenty of water remaining in our packs. The decision to leave early and hike at night was right – dead right.

hh5hh4hh3

The second day requires swimming through icy water. This can be scary with shoes and a backpack. We threw ropes back to the younger boys so they could grab on if they got in trouble. This turned out to be unnecessary, but it was the right decision – dead right.

Late on the second day we found ourselves in the narrows when it started to rain. We decided to run down river and get to high ground to avoid a flash flood. No flood came on this day, but the decision to play it safe was right – dead right.

That night we slept in a cave that was sheltered from the storm outside. After we set up camp we found bear scat all over the place. We moved all the food away from our sleeping area, built a fire at the entrance to keep the bears away, and dried tons of wet firewood over the fire to give us extra fuel for a bonfire. Twice during the night we heard a large animal splashing in the river outside and we stoked up the fire really quick. The decision to prepare tons of firewood and keep the fire raging was right – dead right.

The next morning we were anxious to press on in order to get home on time, but it was raining and we decided it would be wise to wait out the storm. We witnessed a deluge of rain for five hours. Huge waterfalls poured off the canyon walls. The river rose and we watched the flash flood from the safety of our bear cave. The decision to wait out the storm was right – dead right.

hh2hh1

The storm passed and we finally started hiking at noon. We hiked as fast as we could to try to make it out before dark. When darkness came we pressed on with our headlamps walking down a river in the dark for four hours. We really wanted to make it to the end of the hike so we could call and let our families know we were safe, but we got lost in the darkness. We knew we were close to the parking lot but we couldn’t tell if we had passed it in the darkness, and we didn’t know which way to go. We really wanted to keep looking for the parking lot but we knew it was best to stay where we were until the morning so we didn’t get lost any further out of our way. That was the right decision – in fact, it was dead right. In the morning, we found the way and realized we never would have found it in the dark.

Death Hollow was a great adventure, one that we will never forget. I am grateful for the friends that made the trip so much fun, and for the wisdom, experience, and inspiration that helped us to make the right decisions and bring everyone home safely.