IN RE LAUTH

MARY FRANCE, Bankruptcy Judge

The single issue to be decided in the instant Order is whether a debtor may claim an exemption under 11 U.S.C. § 522(d)(5) in an inheritance of his debtor spouse. Lisa Lauth (Lisa) listed on her bankruptcy schedules an interest worth $12,750.00 in her grandmother's estate. She exempted $925.00 of that amount through the "wildcard" exemption granted under § 522(d)(5). She exempted another $8,725.00 through her unused "homestead" exemption under § 522(d)(1). The couple proposes to allow Kevin Lauth (Kevin) to claim an exemption over the remaining $3,100.00 of Lisa's inheritance, so that the full $12,750.00 can be kept out of their bankruptcy estate. The Trustee, Lawrence Young, objects to this exemption scheme.

The Trustee's brief cites In re Cohen, 263 B.R. 724 (Bankr.D.N.J. 2001) which held that a debtor wife could not use a wildcard exemption to exempt a real property that was titled to her debtor husband and his mother. The Court's reasoning was straightforward — "a debtor must have an ownership interest in property before an exemption may be claimed." Id., at 726 (citations omitted.) More specifically, an ownership interest "implies a monetary interest, and something more than a mere right to use . . . the property." Id.

The Cohen Court's reasoning was premised on 11 U.S.C. § 302, which provides that a "joint case" is commenced by the filing of a bankruptcy petition by an individual and his or her spouse, and that after the petition is filed "the court shall determine the extent, if any, to which the debtors' estates shall be consolidated." 11 U.S.C. § 302. The implication of this language is that without a consolidation by the court, the estates are separate.

For their part, the Debtors cite language from Augustine v. United States, 675 F.2d 582 (3^rd Cir. 1982) by which the Court liberally construed the words "any property" in § 522(d)(5) to include "any property that can be considered a part of the estate. . . ." Id., at 586, fn. 8. In that case, the Court allowed joint debtors to use their wildcard/homestead exemption combination to exempt certain farming equipment whose value exceeded the "tools of the trade" exemption permitted them under § 522(d)(6).

Augustine is, however, inapposite here because the property at issue in that case was jointly held personal property, while the instant case deals with property held solely by one debtor spouse.

The bright line rule expressed in Cohen is clearly the one more precisely applicable to the instant case and the one more effective to insure against improper manipulation of the exemptions allowed under § 522(d).

In the instant case, the Trustee had the burden of proving Kevin's lack of an ownership interest in the inheritance. See, Fed.R.Bankr.P. 4003(c); Kaplan v. First Options of Chicago, Inc., 189 B.R. 882, 891 (E.D.Pa. 1995). He successfully bore this burden through Kevin's admission that the inheritance is in Lisa's name only. Therefore, under the Cohen rule, the exemption cannot be taken.

The Objection to the exemption is hereby sustained.