- Case Type:
- Consumer
- Case Status:
- Reversed and Remanded
- Citation:
- BAP No. CO-17-021 (10th Circuit, Jan 26,2018) Not Published
- Tag(s):
-
- Ruling:
- Individuals maintaining an interest in their residence, such as through a self-settled trust, retain an equitable ownership interest that is property of the estate and therefore qualified for the applicable state homestead exemption.
- Procedural context:
- Chapter 7 trustee objected to the debtor’s homestead exemption on the basis that the homestead was owned by a self-settled trust and not the debtor personally. The bankruptcy court sustained the objection, and the debtor appealed. Separately, the chapter 7 trustee successfully prosecuted an unlawful detainer action to evict the debtor from the homestead. The BAP reversed and remanded for a determination by the bankruptcy court whether the debtor was eligible for the increased homestead exemption available to persons over 60.
- Facts:
- Several years prior to filing for bankruptcy relief, Debtor Parr conveyed assets, including his personal residence, to himself as trustee under a revocable self-settled living trust formed under Colorado law. In his original chapter 11 case, Parr indicated on his schedules that he owned no real property. Following conversion of the case to chapter 7, Parr amended his schedules to identify an interest in his personal residence and claimed the homestead exemption under Colorado law. In reversing the bankruptcy court’s conclusion, the BAP looked to existing precedent, including In re Kester, holding that equitable title is sufficient to make a residence property of the estate and, accordingly, eligible for applicable homestead exemption. It is not necessary for the debtor to hold legal title to the residence in order to claim the homestead exemption.
- Judge(s):
- Cornish, Nugent, and Mosier
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
