Court Opinion

ID: 5601116
Source: CourtListenerOpinion
Date Created: 2022-01-11 03:14:38.759807+00
Date Added: 2024-06-11T08:36:45.660314
License: Public Domain

MELTON, Justice,
dissenting.
Because Cassell’s annuity was funded by an inheritance, I cannot agree with the majority’s erroneous conclusion that the annuity in this case provided income to Cassell as a substitute for earned wages. Accordingly, I do not agree that the annuity here qualifies as exempt property for purposes of bankruptcy pursuant to OCGA § 44-13-100 (a) (2) (E).
Under OCGA § 44-13-100 (a) (2) (E):
[A]ny debtor who is a natural person may exempt, pursuant to this article, for purposes of bankruptcy,... payment under a pension, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor[.]
As the United States Supreme Court has made clear, payment plans that would be exempted for purposes of bankruptcy include those that “provide income that substitutes for wages earned as salary or hourly compensation.” Rousey v. Jacoway, 544 U. S. 320, 331 (II) (B) (125 SC 1561, 161 LE2d 563) (2005). For example, social security benefits; unemployment compensation or benefits; a local public assistance benefit; veterans’ benefits; disability or illness benefits; and alimony, support, or separate maintenance would all qualify as exempt payments for purposes of bankruptcy, as they all act as “substitutes for wages.” Id. See also OCGA § 44-13-100 (a) (2). Similarly, “benefit plans offered to employees or the self-employed[5] as a means of future compensation after retirement” would qualify for exempt status because they have “the sole purpose of replacing lost income after retirement through contributions paid into them over time.” In re Michael, 339 BR 798, 803-804 (Bankr. N.D. Ga. 2005).
*473Decided February 18, 2013.
Unlike any of the aforementioned types of payments, an inheritance has nothing to do with replacing lost income from an earned salary or an hourly wage. Rather, much like a winning lottery ticket, it is merely a windfall that immediately benefits the person receiving the funds, regardless of any salary or wages that the person may have earned during their working years or the age at which they received the inheritance. It makes no difference whether or not the inheritance is being collected through deferred payments as an “annuity,” even after one has reached retirement age, because,
[i]f a debtor, whether of retirement age or not, could exempt any annuity payments he received, he could buy an annuity with his inheritance and thus exempt it from his estate. That would create a hole in [OCGA § 44-13-100 (a) (2) (E)] through which its legislative intent could be drained, and courts that have considered such a scenario have understandably rej ected [such an] argument.
In re Green, 2007 Bankr. LEXIS 1182 (Bankr. E.D. Tenn. 2007).
Indeed, in exempting certain benefits from the reach of bankruptcy, the legislature was not aiming to provide a vehicle through which anyone could simply set up an “annuity” to protect their assets from the consequences of bankruptcy. Only those annuities that replace lost income by being “akin to future earnings” are exempted. Green, supra, at *5. Such “annuities” “must be something like a retirement annuity, one funded by money traceable to wages or some other employment benefit rather than one purchased with monies entirely extrinsic to employment.” Id. See also Rousey, supra, 544 U. S. 320 (Where bankruptcy petitioners had deposited money from their employer-sponsored pension plans into Individual Retirement Accounts (IRAs), the IRAs qualified as exempt property for purposes of bankruptcy.). To conclude otherwise would allow a person to unjustly exempt income that should be available to pay just bankruptcy debts simply by purchasing an otherwise qualifying annuity. Because the annuity here was purchased with inherited funds that had nothing to do with earned wages or some other employment benefit, it is not the type of annuity that would be exempted for purposes of bankruptcy pursuant to OCGA § 44-13-100 (a) (2) (E).
I therefore respectfully dissent from the majority.
Schulten, Ward & Turner, Martha A. Miller, for appellant. Eric E. Thorstenberg, for appellee.

 Contrary to the majority’s analysis, the fact that Cassell was self-employed and did not have access to an employer-funded retirement plan is irrelevant, as other instruments exist for the self-employed to plan for retirement well before reaching retirement age.