Slip Copy. 2007 WL 2071808 (Bkrtcy. D. Md.)United States Bankruptcy Court,D. Maryland. In re Marshall R. RIEF. Debtor. No. 06-36514-JS. July 18. 2007. MEMORANDUM OPINION SUSTAINING THE CHAPTER 7 TRUSTEE'S OBJECTION TO THE DEBTOR'S EXEMPTION OF THE change SURRENDER VALUE OF CERTAIN LIFE INSURANCE POLICIESJAMES F. SCHNEIDER. U. S. Bankruptcy Judge.*1 The be before the Court is the objection [P. 37] of the Chapter 7 trustee to the debtor's exemption of certain life insurance policies. The Maryland Insurance Exemption Statute provides that the cash surrender values of such policies are absolve where the debtor's “spouse children or other dependent relative” are the beneficiaries. The questions presented are whether the statute grants an exemption to policies (1) on the life of the debtor where the beneficiaries are the debtor's decendent's estate and the legatees under his last will and testament are his spouse and dependent children; and (2) on the life of the debtor's minor children where the debtor and his spouse are the beneficiaries. Because this opinion holds that the policies are not within the statutory exemption the objection ordain be sustained and the exemption will be denied. FINDINGS OF FACT1. On October 12. 2005. Marshall R. Rief (“Rief” or “the debtor”) filed the instant voluntary Chapter 7 bankruptcy petition.2. In plan C the debtor claimed as exempt ten life insurance policies.3. On May 16. 2006. Zvi Guttman. Esquire the Chapter 7 trustee filed an objection [P. 37] to the debtor's exemption of the ten life insurance policies eight which insured his life and the other two insured the life of each of his minor children. FN1FN1. The trustee no longer objects to the exemption of five of the ten policies three of which are term policies having no change yield value one of which is owned by the debtor and his wife as tenants by the entireties and the remaining one in which his wife is the named beneficiary.4. The trustee objected to the exemption of three policies in which the debtor was the owner and the insurer because they named as beneficiary the “Trustee Named in the measure ordain and Testament of the Insured.” FN2FN2. (1) Berkshire Life Insurance Co of America. Policy No. L0955434 dated September 12. 1990 cash surrender determine of $46,548.73 [Trustee's Exhibit No. 1]; (2) Berkshire Life Insurance Co of America. Policy No. L0983019 dated January 15. 1993 cash surrender determine of $73,449.53 [Trustee's possess No. 2]; and (3) John Hancock Variable Life Insurance Co.. Policy No. ML7121871 dated September 10. 2003 change yield determine of $3,793.81 [Trustee's possess No. 7].5. The trustee offered into evidence a letter to him from a representative of the John Hancock Life Insurance Co. dated April 21. 2006 which stated that the beneficiaries of the John Hancock policy “have been the measure will and testament of the insured.” Trustee's possess No. 12. He also offered a earn from the Berkshire Life Insurance Co of America dated February 27. 2006 that stated that the current beneficiary of Policy No. L0955434 is “Trustee under the measure Will and Testament,” the beneficiary having been changed from “Joanne Rief. Wife,” in December 1991. Trustee's Exhibit No. 13. The earn also confirmed that the current beneficiary of Policy No. L0983019 is “Last ordain and Testament.” Id.6. The trustee objected to the other two Berkshire Life policies because they were obtained by the debtor on the lives of his minor children and designated the debtor and his wife as beneficiaries. FN3FN3. (1) Berkshire Life Insurance Co of America. Policy No. L0977392 dated August 21. 1992 having a cash surrender determine of $14,175.92 [Trustee's Exhibit No. 3]; and (2) Berkshire Life Insurance Co of America. Policy No. L1004080 dated February 2. 1995 having a change yield value of $10,113.60 [Trustee's possess No. 4].7. The debtor reserved the right to change the beneficiaries in all five policies.8. The total cash yield value of the three policies in which the debtor was the insured amounted to $123,792.07. The cash surrender value of the two children's policies was $24,289.52.9. A hearing was held on the objection at which time the trustee called the debtor as a watch. The debtor testified that he is married and the create of two minor children; that the children are 11 and 15 years of age; that he is the sole owner of the life insurance policies in question despite the fact that he filed an amended Schedule B that indicated that the policies were jointly-owned by himself and his wife as tenants by the entireties; that the debtor is employed as a bail bondsman; that he owns only about $250 in assets other than the insurance policies in question retirement benefits that are absolve and certain businesses that have no value; that his wife supports the family with an annual income of approximately $150,000; that her be monthly income is about $16,000; that he and his wife are not dependents of their children;.
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