Tober v. Lang, No. 11-60018 (9th Cir. 2012)
Annotate this CaseAriz. Rev. Stat. 33-1126(A)(6) and (7) allow a debtor in bankruptcy proceedings to exempt the cash surrender value of life insurance policies and proceeds of annuity contracts from the bankruptcy estate if the debtor names certain beneficiaries. Ronda Hummel and Joan Tober separately filed Chapter 7 petitions. Hummel claimed the three life insurance policies she owned were exempt, and Tober claimed the annuity she owned as exempt. Both debtors named their adult, non-dependent daughters as beneficiaries. The Chapter 7 Trustees in both cases objected to the claimed exemptions, arguing they did not apply because the named beneficiaries were not dependents of the debtors. The bankruptcy court overruled the Trustees' objection. On appeal, the bankruptcy appellate panel filed a single order for both cases and reversed, holding that the statutes required the named beneficiaries to be dependents for the exemption to apply. The Ninth Circuit Court of Appeals reversed, holding that as a matter of first impression in Arizona, the statutory text does not require a debtor's child to be a "dependent" to qualify for the exemption. Remanded.
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