Citing caselaw endorsing the liberal construction of exemption statutes, the court adopted the "based upon" analysis and allowed the debtors' exemption. In In re McCabe, 74 B.R. 119 (Bankr. N.D.Iowa 1986), the court was again called upon to construe Iowa Code § 627.6(9)(e). In In re McCabe, the debtors sought to exempt payments from an annuity which contained no express provision conditioning payment on age, but which calculated payments based upon the age of the annuitants.
In re Gilbert, 74 B.R. 1, 2 (Bankr.N.D.Iowa 1985) (Wood, J.). See also In re McCabe, 74 B.R. 119, 120 (Bankr.N.D.Iowa 1986 (Melloy, J.). With respect to the age criterion, this "based on" requirement would apparently be satisfied if "the amount of payment is dependent upon the age" of the payee. McCabe, 74 B.R. at 120.
Huebner relies on a series of Iowa bankruptcy court decisions holding that the phrase on account of age in § 627.6(8)(e) should be construed as meaning based upon age. See In re McCabe, 74 B.R. 119, 120 (Bankr.N.D.Iowa 1986); In re Gilbert, 74 B.R. 1 (Bankr.N.D.Iowa 1985). No payments have been made under Huebner's annuity contracts; rather, he is seeking to exempt the entire annuity corpus from which future payments will be made.
We leave it to the bankruptcy court to devise a system whereby the value of the installments from the trust income due to the beneficiary which become property of the bankruptcy estate shall adjust to Neuton's fluctuating needs. For analogous, prospective constructions of a support provision in federal bankruptcy law, see In re Hotchkiss, 93 B.R. 546, 547-48 (Bkrtcy.N. D. Ohio, 1988) (interpreting provision in 11 U.S.C. § 522(d)(10)(E) regarding sums "reasonably necessary for the support of the debtor and any dependent of the debtor"); In re McCabe, 74 B.R. 119, 122 (Bkrtcy.N.D. Iowa, 1986) (same); In re Miller, 33 B.R. 549, 552 (Bkrtcy.D.Minn. 1983) (same).
The court stated that it saw no difference between an annuity contract which specifically begins payments at age 63 and an annuity contract which starts immediate payments to a person who happens to be age 63. Gilbert, 74 B.R. at 2. In In re McCabe, 74 B.R. 119 (Bankr.N.D.Iowa 1986), the court followed Gilbert and held that a privately purchased annuity contract fell within the scope of the exemption where the contract provided that the amount of the payment was dependent upon the age and sex of the annuitant. In Matter of Lilienthal, 72 B.R. 277
98 B.R. at 500 (quoting Taff. 10 B.R. at 107)). Judge Minahan also considered the case of In re McCabe. 74 B.R. 119 (Bankr. N.D. Iowa 1986). That court made a list very similar to the list referred to above in the Bowder case. Other courts that have considered the issue also reviewed the factors listed above.See, e.g.
(1) debtor's present and anticipated living expenses; (2) debtor's present and anticipated income from all sources; (3) age of the debtor and dependents; (4) health of the debtor and dependents; (5) debtor's ability to work and earn a living; (6) debtor's job skills, training, and education; (7) debtor's other assets, including exempt assets; (8) liquidity of other assets; (9) debtor's ability to save for retirement; (10) special needs of the debtor and dependents; (11) debtor's financial obligations, e.g. alimony or support payments.Id., 98 B.R. at 500 (following In re McCabe, 74 B.R. 119, 122 (Bankr.N.D.Iowa 1986)). The trustee argues that Merlin's IRA is not reasonably necessary for Nixons' support because they will have sufficient retirement income from Social Security and Marlene Nixon's pension. Their projected combined Social Security benefit will be $1,900 per month.
26 U.S.C. § 409 is the section dealing with the establishment of retirement bonds.In re McCabe, 74 B.R. 119, 121 (Bankr.N.D.Iowa 1986). I.R.C. § 401(a)(26) is the minimum participation rule.
See, e.g., In re McCabe, 74 B.R. 119, 122 (Bankr.N.D.Iowa 1986). These factors include the following: the debtor's present and anticipated living expenses and income; the age and health of the debtor and his or her dependents; the debtor's ability to work and earn a living; the debtor's training, job skills and education; the debtor's other assets and their liquidity; the debtor's ability to save for retirement; and any special needs of the debtor and his or her dependents.
See also In re Pauquette, supra. While the words "on account of" are capable of several interpretations, see, 29A Words and Phrases, p. 229, et seq., In re Gilbert, 74 B.R. 1, 2 (Bankr.N.D.Iowa 1985), and In re McCabe, 74 B.R. 119, 120 (Bankr.N.D.Iowa 1986), this Court need not define the term "on account of" to determine whether an IRA is exempt. In construing 11 U.S.C. § 522(d)(10)(E) this Court continues to be mindful of the maxim: exemption statutes are to be liberally construed in favor of the debtor.