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| Article 8 (Fraudulent Trusts) |
| (1) | If an obligor has created a trust knowing that it would be prejudicial to an obligee, the obligee may claim for the cancellation and reinstatement, as prescribed in Article 406 (1) of the Civil Act, against the trustee or beneficiary, even if the trustee has acted in good faith: |
| (2) | In cases falling under the proviso to paragraph (1), where some beneficiaries have not been aware of prejudicing an obligee as at the time they acquired the right to benefit, the obligee may claim for the cancellation and reinstatement as prescribed in the main sentence of paragraph (1) only against the beneficiaries in bad faith. |
| (3) | In cases falling under the main sentence of paragraph (1), the obligee may claim for reinstatement against beneficiaries in good faith to the extent of existing trust property. |
| (4) | Where a trust is canceled and the trust property is reinstated, the truster shall, with respect to the cancelled trust, be responsible to the third person in good faith who has conducted a transaction with the trustee of the relevant trust to the extent of the trust property so reinstated. |
| (5) | An obligee may request a beneficiary in bad faith to transfer the right to benefit he/she has acquired to the truster. In such cases, Article 406 (2) of the Civil Act shall apply |
| (6) | A beneficiary or trustee who has colluded in a fraudulent trust or abetted or aided the truster in creating a fraudulent trust in cases falling under paragraph (1) shall, jointly and severally with the truster, be liable for the compensation for the loss suffered by the obligee therefrom. |