Exemption Retirement Accounts Life Insurance Annuities

Exemptions – 4) Retirement Accounts, Life Insurance and Annuities

In re Rucker, 570 F.3d 1155 (9th Cir. 2009)

Based on the totality of the circumstances, debtor’s private retirement plan established

under CCP § 704.115(b) was not designed and used primarily for retirement purposes, but rather

was primarily designed and used to shield his assets from a large judgment creditor, even though

the debtor never made large withdrawals from the plan.

In re Simpson, 557 F.3d 1010,1015 (9th Cir. 2009)

Under CCP § 704.100, “we conclude that the section applies categorically only to life insurance

and that annuities are not included within the statute’s reach.” Single premium deferred annuity

also didn’t qualify as a private retirement plan under CCP 704.115, since it was not established or

maintained by an employer.

Rousey v. Jacoway, 544 U.S.320, 125 S.Ct. 1561 (2005)

IRAs are exempt under 11 U.S.C. § 522(10)(E) of the federal exemptions.

In re Payne, 323 B.R. 723 (9th Cir. BAP 2005)

“An annuity may be exempt life insurance under California law if it primarily contains

attributes of life insurance. That determination is a factual one, to be made on a case-by-case

basis.” Factors include “whether the primary purpose of the annuity was for investment or life

insurance.”

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In re Stern, 317 F.3d 1111 (9th Cir. 2003), cert. denied, 124 S.Ct. 1657 (2004)

Under Cal.Civ. Pro. Code §704.115(a), funds transferred from an IRA into a non-ERISA

qualified pension plan after an adverse judgment was entered and immediately before filing for

bankruptcy is insufficient as a matter of law to constitute a fraudulent transfer. The private

retirement plan was ruled exempt.

In re Dudley, 249 F.3d 1170 (9th Cir. 2001)

An IRA may qualify for the exemption under § 704.115(a)(3) if the IRA was designed and

used principally for retirement purposes, as opposed to only for retirement purposes.

In re Lieberman, 245 F.3d 1090 (9th Cir. 2001)

California’s private retirement plan statute (Cal. Civ. Pro. Code § 704.115(a)) does not

exempt an arrangement by an individual to use specified assets for retirement purposes.

In re Kim, 257 B.R. 680 (9th Cir. B.A.P. 2000), aff’d, 35 Fed.Appx. 592 (9th Cir. 2002)

Retirement funds in a retirement plan on the date of filing were exempt, even though they

were transferred to an IRA the day after the petition was filed. Exemption rights are determined as

of the date of the filing of the petition.

In re Jacoway, 255 B.R. 234 (9th Cir. B.A.P. 2000), aff’d, 284 F.3d 1323 (9th Cir. 2002)

IRA was exempt even though debtor took monthly partial surrender payments prior to

retirement, where the IRA was used principally for retirement purposes.

In re McKown, 203 F.3d 1188 (9th Cir. 2000)

California debtor’s IRA was exempt from the bankruptcy estate under bankruptcy

California exemption scheme (Cal Civ. P. § 703.140(a))

In re Watson, 161 F.3d 593 (9th Cir. 1998)

The court of appeals affirmed a judgment of the B.A.P. The court held that ERISA does

not exclude from the bankruptcy estate the profit-sharing plan of a corporation when the debtor is

the sole shareholder and participant.

In re Metz, 225 B.R. 173 (9th Cir. B.A.P. 1998)

Company retirement plan became ERISA-qualified for exemption when sole owneremployee

became joint owner with ex-spouse.

In re Friedman, 220 B.R. 670 (9th Cir. B.A.P. 1998)

Bankruptcy debtor could not claim state law exemption for pension plan funds borrowed

from debtor’s own company to pay household debts

In re Moses, 215 B.R. 27 (9th Cir. B.A.P. 1997), aff’d, 167 F.3d 470 (9th Cir. 1999)

Debtor entitled to exemption for Keough plan set up by employer which contained

enforceable anti-alienation provision

In re Spenler, 212 B.R. 625 (9th Cir. B.A.P. 1997)

Income from IRAs not necessary for healthy 55 year old physician’s support upon

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retirement

In re Rawlinson, 209 B.R. 501 (9th Cir. B.A.P. 1997)

IRA exempt under Fed exemptions

In re MacIntyre

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74 F.3d 186 (9th Cir. 1996)

Cal legislature exempted ‘private retirement accounts’ from a debtor’s bankruptcy estate,

and defined ‘private retirement accounts’ as (1) private retirement plans, (2) profit-sharing plans

designed and used for retirement purposes, and (3) self-employed retirement plans and

IRAS….(a)(3) is conditions “to the extent necessary” to provide for the retirement of the debtor

and his dependents.

403(b) annuities are neither self-employed retirement plans nor IRAS thus not subject to

704.115(e) ‘extent necessary’ condition and are 704.115(1)(1) and thus fully exempt under

704.115(b)

In re Conner, 165 B.R. 901 (9th Cir. B.A.P. 1996), aff’d. 73 F.3d 258 (9th Cir. 1996), cert. denied,

519 U.S. 817 (1996)

Debtor’s interest in ERISA plan exempt from bankruptcy estate regardless of debtor’s

control of assets in plan

In re Turner, 186 B.R. 108 (9th Cir. B.A.P. 1995)

Annuity which has life insurance characteristics may be exempt under CCP 704.100(a)

(Pikush distinguished)