Case Summary:
Debtor claimed an interest in a life insurance contract as an exempt annuity under Wis. Stat. § 815.18(3)(f) and claimed an interest in tools as exempt under section 815.18(3)(b). The Debtor first argued that the annuity exemption statute was ambiguous, and that the Debtor in fact owned the annuity. Second, he argued that the exemption statute regarding tools was also ambiguous and that it didn’t require active use of tools in a business to qualify for the exemption. The Trustee objected, first arguing that the funds derived from the life insurance contract did not qualify as an exempt annuity, and second, that the tools were not used in a business of the Debtor, and thus also did not qualify for an exemption. This Court ruled for the Trustee and found that the Debtor could not use the claimed exemptions. First, the Court found that the life insurance contract was unambiguous: the Debtor’s late mother was listed as the owner, not the Debtor. Under the plain language of the statute, Debtor did not qualify for the exemption because he was not the owner. And second, there was no evidence that the Debtor used the tools in connection with any business in the past 4 years, or that he was going to use the tools in a business in the future. Thus, he also couldn’t claim the tools as exempt.
Statutes/Rule References:
Wis. Stat. § 815.18(3)(b) -- Business property
Wis. Stat. § 815.18(3)(f) -- Annuities
Fed. R. Bankr. P. 4003(c) -- Burden of proof
Key Terms:
Business and Farm Property Exemption
Exemptions
Life Insurance and Annuities Exemption
State Law Exemptions