Estate of Short v. Payne (In Re Payne)

OPINION

MARLAR, Bankruptcy Judge.

INTRODUCTION

Before us is the bankruptcy court’s order allowing the debtor’s claimed exemption in a guaranteed minimum annuity with a life contingency feature as “life insurance.” An objecting creditor, joined by the chapter 7 trustee, maintained that the annuity was merely an investment and therefore did not qualify as life insurance under the relevant California exemption statute. The bankruptcy court determined that both parties to the annuity contract had assumed risks and that such risks qualified the annuity as exempt life insurance.

We hold that, while…