S.B. 42 Enrolled

UTAH EXEMPTION CODE AMENDMENTS
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: David L. Gladwell

LONG TITLE
General Description:
This bill makes changes to the Utah Exemptions Act.
Highlighted Provisions:
This bill:
. clarifies that a mobile home may be considered a primary residence under the
homestead exemption; and
. states that funds rolled over from an exempt retirement fund into another exempt
retirement fund are exempt in bankruptcy proceedings.
Monies Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
78-23-3, as last amended by Chapter 370, Laws of Utah 1999
78-23-5, as last amended by Chapter 370, Laws of Utah 1999

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 78-23-3 is amended to read:
78-23-3. Homestead exemption -- Definitions -- Excepted obligations -- Water
rights and interests -- Conveyance -- Sale and disposition -- Property right for federal tax
purposes.
(1) For purposes of this section:

(a) "Household" means a group of persons related by blood or marriage living together in
the same dwelling as an economic unit, sharing furnishings, facilities, accommodations, and
expenses[;].
(b) "Mobile home" is as defined in Section 57-16-3 .
[(b)] (c) "Primary personal residence" means a dwelling or mobile home, and the land
surrounding it, not exceeding one acre, as is reasonably necessary for the use of the dwelling or
mobile home, in which the individual and the individual's household reside[; and].
[(c)] (d) "Property" means:
(i) a primary personal residence;
(ii) real property; or
(iii) an equitable interest in real property awarded to a person in a divorce decree by a
court.
(2) (a) An individual is entitled to a homestead exemption consisting of property in this
state in an amount not exceeding:
(i) $5,000 in value if the property consists in whole or in part of property which is not the
primary personal residence of the individual; or
(ii) $20,000 in value if the property claimed is the primary personal residence of the
individual.
(b) If the property claimed as exempt is jointly owned, each joint owner is entitled to a
homestead exemption; however
(i) for property exempt under Subsection (2)(a)(i), the maximum exemption may not
exceed $10,000 per household; or
(ii) for property exempt under Subsection (2)(a)(ii), the maximum exemption may not
exceed $40,000 per household.
(c) A person may claim a homestead exemption in either or both of the following:
(i) one or more parcels of real property together with appurtenances and improvements;
or
(ii) a mobile home in which the claimant resides.

- 2 -

(3) A homestead is exempt from judicial lien and from levy, execution, or forced sale
except for:
(a) statutory liens for property taxes and assessments on the property;
(b) security interests in the property and judicial liens for debts created for the purchase
price of the property;
(c) judicial liens obtained on debts created by failure to provide support or maintenance
for dependent children; and
(d) consensual liens obtained on debts created by mutual contract.
(4) (a) Except as provided in Subsection (4)(b), water rights and interests, either in the
form of corporate stock or otherwise, owned by the homestead claimant are exempt from
execution to the extent that those rights and interests are necessarily employed in supplying water
to the homestead for domestic and irrigating purposes.
(b) Those water rights and interests are not exempt from calls or assessments and sale by
the corporations issuing the stock.
(5) (a) When a homestead is conveyed by the owner of the property, the conveyance may
not subject the property to any lien to which it would not be subject in the hands of the owner.
(b) The proceeds of any sale, to the amount of the exemption existing at the time of sale,
is exempt from levy, execution, or other process for one year after the receipt of the proceeds by
the person entitled to the exemption.
(6) The sale and disposition of one homestead does not prevent the selection or purchase
of another.
(7) For purposes of any claim or action for taxes brought by the United States Internal
Revenue Service, a homestead exemption claimed on real property in this state is considered to be
a property right.
Section 2. Section 78-23-5 is amended to read:
78-23-5. Property exempt from execution.
(1) (a) An individual is entitled to exemption of the following property:
(i) a burial plot for the individual and his family;

- 3 -

(ii) health aids reasonably necessary to enable the individual or a dependent to work or
sustain health;
(iii) benefits the individual or his dependent have received or are entitled to receive
because of disability, illness, or unemployment from any source;
(iv) benefits paid or payable for medical, surgical, or hospital care to the extent they are
used by an individual or his dependent to pay for that care;
(v) veterans benefits;
(vi) money or property received, and rights to receive money or property for child
support;
(vii) one clothes washer and dryer, one refrigerator, one freezer, one stove, one
microwave oven, one sewing machine, all carpets in use, provisions sufficient for 12 months
actually provided for individual or family use, all wearing apparel of every individual and
dependent, not including jewelry or furs, and all beds and bedding for every individual or
dependent;
(viii) works of art depicting the debtor or the debtor and his resident family, or produced
by the debtor or the debtor and his resident family, except works of art held by the debtor as part
of a trade or business;
(ix) proceeds of insurance, a judgment, or a settlement, or other rights accruing as a result
of bodily injury of the individual or of the wrongful death or bodily injury of another individual of
whom the individual was or is a dependent to the extent that those proceeds are compensatory;
(x) except as provided in Subsection (1)(b), any money or other assets held for or payable
to the individual as a participant or beneficiary from or an interest of the individual as a participant
or beneficiary in a retirement plan or arrangement that is described in Section 401(a), 401(h),
401(k), 403(a), 403(b), 408, 408A, 409, 414(d), or 414(e) of the United States Internal Revenue
Code of 1986, as amended; and
(xi) the interest of or any money or other assets payable to an alternate payee under a
qualified domestic relations order as those terms are defined in Section 414(p) of the United
States Internal Revenue Code of 1986, as amended.

- 4 -

(b) The exemption granted by Subsection (1)(a)(x) does not apply to:
(i) an alternate payee under a qualified domestic relations order, as those terms are
defined in Section 414(p) of the United States Internal Revenue Code of 1986, as amended; or
(ii) amounts contributed or benefits accrued by or on behalf of a debtor within one year
before the debtor files for bankruptcy. This may not include amounts directly rolled over from
other funds which are exempt from attachment under this section.
(2) Exemptions under this section do not limit items which may be claimed as exempt
under Section 78-23-8 .

- 5 -