The bankruptcy “head of household” exemption in Missouri applies to your children, and not someone else’s children.  The children have to be related to the head of the family (either a man or a woman) either biologically or by adoption.  That was the gist of a ruling by the Eighth Circuit B.A.P. in a recent Missouri case.  The case was In Re Mark Turpen (B.A.P. 12-6039), from the Western District of Missouri.

Turpen was single and lived with his two minor children, an unrelated woman, and the woman’s three minor children. He filed a voluntary Chapter 7 petition in 2011.  He then filed amended schedules B and C on February 20, 2012. The amended schedule B listed a 2011 tax refund of $8,491.00.  The amended schedule C listed claimed exemptions in that refund totaling $3,600.00:  $600.00 under § 513.430.1(3) and $3,000.00 under § 513.440, $1,250.00 for Turpen as head of the family, and $350.00 each for his two minor children and the woman’s three minor children.

The trustee objected to the $1,050.00 exemption for the woman’s three minor children on the basis that they are not related to the debtor.  The trustee also requested an order compelling turnover of $4,072.98.   A hearing was held on both motions. The parties disputed whether § 513.440 allows the head of a family to claim exemptions for unrelated children.

The bankruptcy court ruled that the language of § 513.440 is plain and unambiguous and held that to fall within the exemption, children must be related to the head of the family either biologically or by adoption.  Turpen did not like this ruling, and appealed it.

Missouri’s statute 513.440 states:

Each head of a family may select and hold, exempt from execution, any other property, real, personal or mixed, or debts and wages, not exceeding in value the amount of one thousand two hundred fifty dollars plus three hundred fifty dollars for each of such person’s unmarried dependent children3 under the age of twenty-one years…

Turpen’s argument was that the word “children” as used in §513.440 is ambiguous, demanding a broader interpretation of the statute. He asserts that the Merriam-Webster online dictionary provides four definitions for the word child and that because the definition “a son or daughter of human parents” is listed fourth numerically, prioritized below three other meanings, the statute includes all children of the family.

Turpen also argued that the statute permits exemptions for children of which the head of the family is in loco parentis. He cited State v. Smith, 485 S.W.2d 461 (Mo. Ct. App. 1972).

The B.A.P. was not persuaded.  Contrary to Turpen’s argument, the court in Smith was not interpreting the word “child” but rather the phrase “any other person having the care and control.” The statute at issue here contains no comparable language regarding “any other person with care and control of such infant.” Section 513.440 plainly states that $350.00 exemptions are available only for the head of the family’s unmarried dependent children.

The bottom line here is that Missouri’s head of household exemption can only be used for situations where there is a parental relationship, either by birth or by adoption.  The ruling makes sense.  In order for the exemption to have some testability and some meaning, there needs to be a familial relationship that can be verified with some certainty.

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