Also known as: exempt asset · exempt property
Written by attorneys · grounded in primary & secondary sources — see below
A category of property that a debtor or surviving spouse may retain free from the claims of creditors or certain estate distributions. The classification protects designated items such as homestead interests, household goods, and allowances so that the protected party retains a minimal economic base after insolvency or death of a spouse.
Evelyn Ellison signed a written agreement before marrying Edward Everett that waived all rights to homestead allowance, exempt property, and family allowance. After Edward died, Evelyn sought to claim exempt property from the estate. The probate court enforced the agreement and denied the claim because the waiver was executed in writing and without duress.
Emanuel Escobar feloniously killed his spouse Eileen Epstein. He then petitioned the probate court for an exempt property allowance from her estate. The court ruled that the killing caused forfeiture of all benefits under the probate article, including the exempt property claim, and directed distribution as if he had disclaimed the interest.
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Ezra Eastman and his spouse held their residence as tenants by the entirety. The United States obtained a tax judgment against Ezra alone and sought to attach the property. The court held that the federal tax lien could reach Ezra's interest in the tenancy despite state-law protections that might otherwise shield the asset from ordinary creditors.
Eric Espinoza claimed a homestead exemption in residential property during divorce proceedings. His spouse Evelyn Ellison argued that the property did not qualify because Eric had not occupied it as his primary residence for the statutory period. The court examined the occupancy facts and denied the exemption because the statutory requirements were not satisfied.
A surviving spouse may waive rights to exempt property only by a written agreement signed before or after marriage. The agreement is enforceable without consideration. Courts will not enforce the waiver if the spouse proves it was involuntary or the product of duress.
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An individual who feloniously and intentionally kills the decedent forfeits all benefits with respect to the decedent's estate, including exempt property. The estate then passes as if the killer had disclaimed the interest. This rule applies regardless of whether the killing affects probate or nonprobate transfers.
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Exempt property is initially included in the bankruptcy estate but is promptly returned to the debtor. Only nonexempt assets are used to satisfy creditors. Debtors may convert nonexempt property into exempt assets before filing, though courts scrutinize such conversions for fraud.
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Homestead allowance, exempt property, and family allowance are payable in addition to any elective-share amount. The statute expressly provides that these allowances are not charged against the elective share. This separation ensures the surviving spouse receives both immediate support and a fractional share of the augmented estate.
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…played in "creating and defining" property interests. By erasing the careful line between state laws that purport to disclaim or exempt property interests after the fact, which the federal tax lien does not respect, and state laws' definition of property and property rights, which the federal tax lien does respect, the Court does…