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S.B. 50

             1     

PROPERTY EXEMPT FROM EXECUTION

             2     
2001 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Carlene M. Walker

             5      This act modifies the Judicial Code to include additional benefits and contracts as exempt
             6      from judicial process. The act makes technical changes.
             7      This act affects sections of Utah Code Annotated 1953 as follows:
             8      AMENDS:
             9          78-23-5, as last amended by Chapter 370, Laws of Utah 1999
             10          78-23-9, as last amended by Chapter 13, Laws of Utah 1998
             11      REPEALS:
             12          78-23-6, as enacted by Chapter 111, Laws of Utah 1981
             13          78-23-7, as enacted by Chapter 111, Laws of Utah 1981
             14      Be it enacted by the Legislature of the state of Utah:
             15          Section 1. Section 78-23-5 is amended to read:
             16           78-23-5. Property exempt from execution.
             17          (1) (a) An individual is entitled to exemption of the following property:
             18          (i) a burial plot for the individual and [his] the individual's family;
             19          (ii) health aids reasonably necessary to enable the individual or a dependent to work or
             20      sustain health;
             21          (iii) benefits the individual or [his] the individual's dependent have received or are entitled
             22      to receive from any source because of:
             23          (A) disability[,];
             24          (B) illness[,]; or
             25          (C) unemployment [from any source];
             26          (iv) benefits paid or payable for medical, surgical, or hospital care to the extent they are
             27      used by an individual or [his] the individual's dependent to pay for that care;


             28          (v) veterans benefits;
             29          (vi) money or property received, and rights to receive money or property for child support;
             30          (vii) money or property received, and rights to receive money or property for alimony or
             31      separate maintenance;
             32          [(vii)] (viii) (A) one:
             33          (I) clothes washer and dryer[, one];
             34          (II) refrigerator[, one];
             35          (III) freezer[, one];
             36          (IV) stove[, one];
             37          (V) microwave oven[, one]; and
             38          (VI) sewing machine[,];
             39          (B) all carpets in use[,];
             40          (C) provisions sufficient for 12 months actually provided for individual or family use[,];
             41          (D) all wearing apparel of every individual and dependent, not including jewelry or furs[,];
             42      and
             43          (E) all beds and bedding for every individual or dependent;
             44          [(viii)] (ix) except works of art held by the debtor as part of a trade or business, works of
             45      art:
             46          (A) depicting:
             47          (I) the debtor; or
             48          (II) the debtor and [his] the debtor's resident family[,]; or
             49          (B) produced by:
             50          (I) the debtor; or
             51          (II) the debtor and [his] the debtor's resident family[, except works of art held by the debtor
             52      as part of a trade or business];
             53          [(ix)] (x) proceeds of insurance, a judgment, or a settlement, or other rights accruing as
             54      a result of bodily injury of the individual or of the wrongful death or bodily injury of another
             55      individual of whom the individual was or is a dependent to the extent that those proceeds are
             56      compensatory;
             57          (xi) proceeds or benefits of life insurance contracts payable on the death of an insured, if
             58      the individual was the spouse or a dependent of the insured;


             59          (xii) proceeds and avails of any unmatured life insurance contracts owned by the
             60      individual;
             61          [(x)] (xiii) except as provided in Subsection (1)(b), any money or other assets held for or
             62      payable to the individual as a participant or beneficiary from or an interest of the individual as a
             63      participant or beneficiary in:
             64          (A) a retirement plan or arrangement that is described in Section 401(a), 401(h), 401(k),
             65      403(a), 403(b), 408, 408A, 409, 414(d), or 414(e) [of the United States], Internal Revenue Code
             66      [of 1986, as amended]; [and]
             67          (B) an annuity as defined in Section 31A-1-301 ; and
             68          (C) any similar plan providing benefits other than by reason of illness or disability; and
             69          [(xi)] (xiv) the interest of or any money or other assets payable to an alternate payee under
             70      a qualified domestic relations order as those terms are defined in Section 414(p) [of the United
             71      States], Internal Revenue Code [of 1986, as amended].
             72          (b) The exemption granted by Subsection (1)(a)[(x)](xiii) does not apply to:
             73          (i) an alternate payee under a qualified domestic relations order, as those terms are defined
             74      in Section 414(p) [of the United States], Internal Revenue Code [of 1986, as amended]; or
             75          (ii) amounts contributed or benefits accrued by or on behalf of a debtor within one year
             76      before the debtor files for bankruptcy.
             77          (2) Exemptions under this section do not limit items [which] that may be claimed as
             78      exempt under Section 78-23-8 .
             79          Section 2. Section 78-23-9 is amended to read:
             80           78-23-9. Exemption of proceeds from property sold, taken by condemnation, lost,
             81      damaged, or destroyed -- Tracing exempt property and proceeds.
             82          (1) (a) [If] An individual who owned property described in this Subsection (1) is entitled
             83      to an exemption of proceeds that are traceable for one year after the compensation for the property
             84      is received if:
             85          (i) (A) the property, or a part [thereof] of the property, [that] could have been claimed
             86      exempt under Subsection 78-23-5 (1)(a)(i) or (ii)[,]; or
             87          (B) the property is personal property subject to a value limitation under Subsection
             88      78-23-8 (1)(a), (b), or (c); and
             89          (ii) the property has been:


             90          (A) sold or taken by condemnation[,]; or [has been]
             91          (B) lost, damaged, or destroyed; and
             92          (C) the owner has been compensated [therefor, the individual is entitled to an exemption
             93      of proceeds that are traceable for one year after the proceeds are received] for the property.
             94          (b) The exemption of proceeds under this Subsection (1) does not entitle the individual to
             95      claim an aggregate exemption in excess of the value limitation otherwise allowable under Section
             96      78-23-3 or 78-23-8 .
             97          (2) Money or other property exempt under Subsection 78-23-5 (1)(a)(iii), (iv), (v), [or] (vi),
             98      [or exempt to the extent reasonably necessary for support under Section 78-23-6 ,] (vii), (xii), or
             99      (xiii)(B) or (C) remains exempt after its receipt by, and while it is in the possession of, the
             100      individual or in any other form into which it is traceable.
             101          (3) Money or other property and proceeds exempt under this chapter are traceable under
             102      this section by application of:
             103          (a) the principle of:
             104          (i) first-in first-out[,];
             105          (ii) last-in last-out[,]; or
             106          (b) any other reasonable basis for tracing selected by the individual.
             107          Section 3. Repealer.
             108          This act repeals:
             109          Section 78-23-6, Property exempt from execution to extent necessary for support.
             110          Section 78-23-7, Exemption of unmatured life insurance contracts.




Legislative Review Note
    as of 1-4-01 2:27 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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