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13.3.7 Stacking of Exemptions

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13.3.7 Stacking of Exemptions

Inside or outside of bankruptcy, the possibility of stacking one exemption with another, such as a wildcard exemption, should be considered. For example, a debtor was able to stack New Hampshire’s wildcard exemption—which provided for a $1000 exemption for any property and up to $7000 in certain unused exemptions—with a $5000 exemption for tools of the trade in order to exempt $13,000 in mechanic’s tools.118 However, some states’ exemption laws are phrased in a way that limits stacking in one way or another.119

Many states also allow married couples to claim two exemptions and to stack them to exempt a larger amount of personal property.120 Courts may require each member of the couple to have an ownership interest in the item.121 But a spouse’s interest in commonly owned or community property may be sufficient.122 If the couple is living apart, some courts allow each partner a full complement of exemptions,123 while others allow an exemption only for the former marital home or only one exemption per couple for other property.124

Courts may interpret a state domestic partnership statute to require the partners to be treated as married couples for exemption purposes.125 Since the Equal Protection Clause requires states to allow same-sex marriages and to recognize same-sex marriages performed in other states,126 unequal treatment of married same-sex couples, as compared to married heterosexual couples, for purposes of exemption law would likely be unconstitutional.

Footnotes

  • 118 Landry v. Landry, 917 A.2d 1262 (N.H. 2007). See also In re Irish, 311 B.R. 63 (B.A.P. 8th Cir. 2004) (debtor school teacher may stack Iowa exemption for 75% of wages with exemption for “accrued wages or tax refund” to exempt July and August salary that accrued at end of school year in June); Little v. Reaves (In re Reaves), 256 B.R. 306 (B.A.P. 9th Cir. 2000) (California motor vehicle exemption may be stacked with wildcard and unused portion of homestead exemptions), aff’d on other grounds, 285 F.3d 1152 (9th Cir. 2002); In re Trentman, 2018 WL 4090587 (Bankr. N.D. Ohio Aug. 27, 2018) (debtor may stack wildcard exemption with exemption for cash, which explicitly includes tax refunds); In re Feliciano, 487 B.R. 47 (Bankr. D. Mass. 2013) (allowing married debtors to stack federal wildcard exemptions to protect non-homestead real property); In re Winters, 2010 WL 1418337 (Bankr. D. Neb. Mar. 17, 2010) (when motor vehicle was tool of trade, debtors could stack tools of trade and wildcard exemption); In re Mootosammy, 387 B.R. 291 (Bankr. M.D. Fla. 2008) (debtor could stack statutory $4000 in lieu of homestead wildcard with $1000 constitutional personal property exemption and $1000 motor vehicle exemption to exempt $6000 of value of truck); In re Hafner, 383 B.R. 350 (Bankr. N.D. Fla. 2008); In re Bezares, 383 B.R. 796 (Bankr. M.D. Fla. 2007) (Florida’s statutory in lieu of homestead wildcard can be stacked with constitutional personal property exemption); In re Urie, 2006 WL 533514 (Bankr. W.D. Mo. Jan. 31, 2006) (Missouri exemption for “any motor vehicle . . . in the aggregate” may be split between two vehicles and stacked with wildcard exemption; wedding ring exemption may be stacked with jewelry exemption); In re Gagnon, 2005 WL 1331142 (Bankr. D.N.H. June 1, 2005) (New Hampshire wildcard exemption of $1000 plus up to $7000 in unused exemptions may be applied to one piece of property or spread over several); Price v. Mfrs. & Traders Tr. Co. (In re Price), 266 B.R. 572 (Bankr. W.D.N.Y. 2001) (New York law exempts 90% of wages and $2500 in cash in hand; cash exemption may be used to protect the 10% of wages not protected by wage exemption); Vaillancourt v. Granite Grp. (In re Vaillancourt), 260 B.R. 66 (Bankr. D.N.H. 2001) (New Hampshire wildcard exemption for “any property” may be stacked with homestead or personal property exemptions); In re Rutter, 247 B.R. 334 (Bankr. M.D. Fla. 2000) (debtor may stack Florida’s constitutional personal property exemption with its statutory motor vehicle exemption to exempt entire equity in truck); In re Ambrose, 179 B.R. 982 (Bankr. S.D. Ga. 1995) (state wildcard exemption can be stacked with $200-per-item household goods exemption to enable debtors to exempt entire value of appliances and living room set). See also In re Anderson, 932 P.2d 1110 (Okla. 1996) (liberally construing Oklahoma law, which allows one $50,000 exemption for each interest in a claim for personal injury, death, or workers’ compensation, to allow two exemptions when plaintiff’s work injury resulted in workers’ compensation claim and malpractice judgment against doctor who performed “unauthorized surgery”). But see In re Struckhoff, 231 B.R. 69 (Bankr. E.D. Mo. 1999) (Missouri exemption for “any” motor vehicle allows exemption of only one vehicle per debtor, so, if debtor’s interest in car is worth less than the statutory $1000, balance may not be applied to other vehicle or personal property).

  • 119 See, e.g., In re Jenks, 2008 WL 3005165 (Bankr. S.D. Ind. July 31, 2008) (wildcard for “other real or personal property” cannot be stacked with homestead exemption); In re Hughes, 244 B.R. 448 (Bankr. D.S.D. 1999) (refusing to allow stacking of “additional personal property” exemption to protect proceeds of sale of homestead that exceeded homestead limit). But cf. In re Runkle, 2008 WL 429197 (Bankr. N.D. Iowa Feb. 14, 2008) (Iowa exemption for “other personal property not otherwise specifically provided for” cannot be stacked with capped exemption). See also In re Thornton, 269 B.R. 682 (W.D. Mo. 2001) (debtors who resided in manufactured home not permitted to stack homestead exemption with exemption for “mobile home used as principal residence”; when home was permanently attached, homestead exemption applied).

  • 120 In re Lampe, 278 B.R. 205 (B.A.P. 10th Cir. 2002) (Kan. law) (spouses could stack exemptions in farm equipment purchased with funds from couple’s joint account, when wife signed notes and state law presumes equal ownership by husband and wife), aff’d, 331 F.3d 750 (10th Cir. 2003); In re Halcomb, 2011 WL 2133560 (S.D. Ind. May 25, 2011) (allowing wife to exempt entire value of car owned in joint tenancy, leaving husband enough exemption to protect solely owned motorcycle); Planned Parenthood of Columbus/Willamette, Inc. v. Am. Coal. of Life Activists, 2007 WL 4118597 (S.D. Ohio Nov. 16, 2007) (debtor and non-debtor spouse may stack aggregate and per item household goods exemptions); Schilling v. Tran, 287 B.R. 887 (W.D. Ky. 2002) (allowing husband and wife to stack motor vehicle exemptions to exempt one vehicle); In re Watson, 2012 WL 8436264 (Bankr. E.D. Cal. Dec. 12, 2012) (couple could stack tools of trade exemption, even if each spouse did not personally use each tool, if both spouses substantially participated in business); In re Ventura, 2011 WL 1979864 (Bankr. E.D.N.Y. May 20, 2011) (adding wife’s name to title of car previously titled in husband alone was permissible exemption planning, not fraudulent transfer; allowing couple to stack two exemptions); In re Tucker, 430 B.R. 499 (Bankr. N.D. Ill. 2010) (non-debtor wife may stack her $4000 wildcard with that of debtor husband, to exempt entire amount in joint bank account); In re Reisdorff, 2010 WL 4852457 (Bankr. D. Neb. Nov. 27, 2010) (spouses who each used jointly owned vehicle to commute to work could stack two tools of trade and two wildcard exemptions); In re Sullivan, 2008 WL 3914494 (Bankr. E.D. Tenn. Aug. 20, 2008) (married debtors who own property in tenancy by entireties may each exempt up to 50% of the value of each piece of property, up to the $4000 per person limit); In re Gatto, 380 B.R. 88 (Bankr. M.D. Fla. 2007) (married couple may stack $4000 statutory in lieu of homestead and $1000 constitutional personal property exemptions for total of $10,000 per couple; when title listed both spouses in alternative, each had ownership interest); In re Bell, 333 B.R. 839 (Bankr. W.D. Mo. 2005) (married couple could stack head of household, two wildcard, one motor vehicle, and part of another motor vehicle exemption to exempt one vehicle and apply balance of second motor vehicle exemption to second vehicle); In re Hoffpauir, 258 B.R. 447 (Bankr. D. Idaho 2001) (when amended statute eliminated “per household” caps, each spouse could claim exemption in fire insurance proceeds of destroyed household goods); In re Guyot, 240 B.R. 326 (Bankr. D. Minn. 1999) (when Minnesota statute allowed exemption of one life insurance contract, each spouse could exempt one contract); In re Sherman, 237 B.R. 551 (Bankr. N.D.N.Y. 1999) (when New York’s homestead and personal property exemptions refer to “an individual debtor,” a married couple may stack two exemptions); In re Jackson, 194 B.R. 867 (Bankr. D. Ariz. 1995) (allowing married debtors to stack their $1500 motor vehicle exemptions to exempt $3000 in one car). But see In re Hedrick, 441 B.R. 601 (Bankr. S.D. Ill. 2010) (couple’s household goods owned in tenancy in common; wife could exempt only her 50% share; when husband did not exempt his share, trustee could sell goods), aff’d, 2011 WL 2199371 (S.D. Ill. June 7, 2011) (if couple owns property in tenancy in common, one spouse may exempt only 50% of its value); In re Garvin, 262 B.R. 529 (Bankr. D. Mont. 2001) (married debtors could claim only one state exemption in jointly owned motor vehicle). But cf. In re Papageorge, 2018 WL 6440603 (Bankr. E.D. Wis. Dec. 7, 2018) (individual debtor may not stack his exemptions with those of his non-filing spouse); In re Nye, 250 B.R. 46 (Bankr. W.D.N.Y. 2000) (each spouse can exempt only their own one-half interest in a particular item, even if exemption amount would cover its full value); In re Fox, 302 P.3d 1137 (Nev. 2013) (debtor may not claim or stack exemptions on behalf of non-debtor spouse; Nevada statute protects only property “of the judgment debtor”). See generally § 15.2.3.2, infra (stacking of homestead exemptions).

  • 121 In re Trentman, 2018 WL 4090587 (Bankr. N.D. Ohio Aug. 27, 2018) (couple may not stack exemptions for tax refund attributable to husband’s earnings; wages are sole property of wage earner); In re Frankel, 508 B.R. 527 (Bankr. D. Mass. 2014) (wife could not claim exemption for car titled in husband’s name, even though she was primary driver and made many of the payments); In re Gazvoda, 2011 WL 2946171 (Bankr. N.D. Ohio July 21, 2011) (couple may not stack exemptions for tax refund attributable to earnings of only one spouse); In re Basler, 2011 WL 867131 (Bankr. D. Neb. Mar. 10, 2011) (when life insurance was owned by one spouse, only he could exempt it; no stacking); In re Toland, 346 B.R. 444 (Bankr. N.D. Ohio 2006) (husband could not claim exemption in car titled in wife’s name; Ohio exemption law requires “an interest” in property; one spouse has no interest in other spouse’s property); In re Kieffer, 279 B.R. 290 (Bankr. D. Kan. 2002) (spouses could stack exemptions for farm equipment; wife was co-owner because equipment was purchased with joint funds and wife signed notes); In re Miller, 255 B.R. 221 (Bankr. D. Neb. 2000) (if truck titled in husband’s name, only husband may claim exemption); In re Schapiro, 246 B.R. 751 (Bankr. W.D.N.Y. 2000) (New York exemption for cash protected a bequest but, when only husband was beneficiary, couple could claim only one exemption). See also In re Hejmowski, 296 B.R. 645 (Bankr. W.D.N.Y. 2003) (when one spouse works and other does not, but employed spouse deposits her paycheck into a joint account, half of it is a gift to other spouse, so other spouse has an ownership interest in the wages, and the spouses can stack their exemptions for joint tax refund they receive based on those wages). But see In re Landsinger, 2012 WL 2994832 (Bankr. W.D. Wis. July 23, 2012) (when real property was titled in wife alone, but mortgage was being paid from joint account, husband could exempt one-half of equity acquired by making payments and stack it with wife’s wildcard). See generally § 15.2.3.2, infra (stacking of homestead exemption).

  • 122 In re Poivey, 2018 WL 2186886 (Bankr. E.D. Wis. May 11, 2018) (couple sought to stack exemptions for mineral rights owned by wife before marriage; under Wisconsin law, the mineral rights were the wife’s sole property but the royalties were community property; allowing husband to exempt the royalties but not the mineral rights); In re Stone, 504 B.R. 908 (Bankr. C.D. Ill. 2014) (when couple owned all property in common, wife could claim exemption for tools used by husband); In re Bippert, 311 B.R. 456 (Bankr. W.D. Tex. 2004) (both spouses sought to exempt cause of action for personal injury to wife alone; looking to state marital property law and allowing each to exempt their property in claim; claim was wife’s separate property except for lost wages, which were community, and loss of consortium, which was husband’s separate property); In re Perez, 302 B.R. 661 (Bankr. D. Ariz. 2003) (spouse who filed individual bankruptcy could stack own and non-filing spouse’s motor vehicle exemptions to protect family car; community property was part of bankruptcy estate, and individual spouse could act on behalf of community). But cf. In re Horstman, 276 B.R. 80 (Bankr. E.D.N.C. 2002) (wife may not use her wildcard exemption to exempt husband’s car; her ownership interest insufficient, even though car was marital property under state domestic relations law).

  • 123 In re Colwell, 196 F.3d 1225 (11th Cir. 1999) (when couple are legitimately living apart—that is, not for purposes of fraud—each is entitled to a homestead exemption); In re Roberts, 219 B.R. 235 (B.A.P. 8th Cir. 1998); In re Hall, 395 B.R. 722 (Bankr. D. Kan. 2008) (married couple living apart may claim two homesteads, provided that each spouse has clearly established a homestead and arrangement is not for purpose of defrauding creditors), aff’d, 441 B.R. 680 (B.A.P. 10th Cir. 2009); In re Roberge, 307 B.R. 442 (Bankr. D. Vt. 2004) (exemptions intended to protect family group; married debtors living apart, each with a child, were two family groups, each entitled to full set of exemptions). Cf. Mayo v. Sikes, 2006 WL 1750882 (W.D. La. June 20, 2006) (Louisiana exempts one motor vehicle “per household”; only one exemption allowed when evidence insufficient to show that divorcing couple were living apart on bankruptcy petition date). But see In re Ruck, 451 B.R. 128 (Bankr. D. Kan. 2011) (divorcing couple who are still married on petition date may exempt only one homestead). But cf. In re Minor, 526 B.R. 305 (Bankr. D. Wis. 2015) (denying exemption for second house to which one partner retreated in time of marital strife; distinguishing cases involving permanently separated couples; debtors here were together on petition date).

  • 124 Forreststream Holdings, Ltd. v. Shenkman, 2017 WL 4176352 (N.D. Cal. Sept. 21, 2017) (divorcing couple, who had long been living apart, could claim only one California homestead); In re Thorpe, 251 B.R. 723 (Bankr. W.D. Mo. 2000) (when married couple was living apart without dependents, only one motor vehicle and one wildcard exemption allowed for motorcycle of which husband was sole owner). See also In re Meier, 2010 WL 4340814 (Bankr. D.S.D. Oct. 27, 2010) (when couple was separated, each spouse living with a child or children from prior marriage, there were two households but only one family, so only one spouse—the one with the higher income—could claim “head of family” wildcard). Cf. § 15.2.3.2, infra (whether married couples may claim two homestead exemptions).

  • 125 See In re Rabin, 359 B.R. 242 (B.A.P. 9th Cir. 2007) (intent of California domestic partnership act was to treat domestic partners as spouses; partners who had merged their finances entitled to only one exemption, same as married couple).

  • 126 Obergefell v. Hodges, ___ U.S. ___, 135 S. Ct. 2584, 192 L. Ed. 2d 609 (2015).