Question by the United States Bankruptcy Court for the
District of Rhode Island BK 16-11859.
case came before the Supreme Court pursuant to a question
certified by the United States Bankruptcy Court for the
District of Rhode Island in accordance with Article 1, Rule 6
of the Supreme Court Rules of Appellate Procedure.
Debtor: Christopher M. Lefebvre, Esq.
Trustee: Stacy B. Ferrara, Esq.
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and
case comes before us pursuant to an April 12, 2018 order of
the United States Bankruptcy Court for the District of Rhode
Island (the Bankruptcy Court) certifying a question to this
Court in accordance with Article I, Rule 6(a) of the Supreme
Court Rules of Appellate Procedure. The certified question reads
"Whether a debtor may claim an exemption in an inherited
Individual Retirement Annuity [IRA], including one inherited
from a non-spouse, pursuant to R.I. Gen. Laws §
reasons set forth in this opinion, we answer the certified
question in the affirmative-G.L. 1956 § 9-26-4(11) does
permit a debtor to claim an exemption for an inherited
Individual Retirement Annuity (IRA).
parties reached an agreed statement of facts, which was
attached to and incorporated in the Certification Order
transmitted to this Court from the Bankruptcy Court. The
parties further stipulated that "there are no
outstanding issues of disputed fact before the Court."
Accordingly, in relating the facts of this case, we rely
solely on the agreed statement of facts.
debtor, Lynette Kapsinow, "filed a voluntary Chapter 7
[bankruptcy petition] on October 31, 2016 * * *." Stacy
B. Ferrara (the Trustee) was appointed as the trustee for
that matter. As is permitted by 11 U.S.C. § 522(b), the
debtor in this case opted for state exemptions. See In re
Strandberg, 253 B.R. 584, 586 (Bankr. D.R.I. 2000)
(discussing the fact that Rhode Island has not opted out of
the federal bankruptcy exemption scheme and that,
consequently, a debtor in Rhode Island may choose either
state or federal exemptions). The debtor's bankruptcy
petition sought, under Rhode Island law, to exempt an IRA
held by American Century Investments in the sum of $84,
962.88 (the inherited IRA) pursuant to Rhode Island state
statute § 9-26-4(11). The Trustee objected.
inherited IRA in question was inherited by the debtor from
her late mother, Miriam Kapsinow. At the time of her death,
Miriam Kapsinow "owned an Individual Retirement Annuity
with Aviva Life and Annuity Company" (Aviva), of which
the debtor was the beneficiary. Miriam Kapsinow's account
was a "qualified retirement account as defined under 408
of the Internal Revenue Code." On April 15, 2010,
following her mother's death, the debtor "executed
an Annuity Claim Form seeking claim to [Miriam Kapsinow's
IRA] and requested that the proceeds be 'moved to an
Inherited IRA.'" Aviva then opened an Inherited
Annuity Account for the debtor.
7, 2012, the debtor directed Aviva to "surrender and
transfer all of her beneficial interest in and to" the
inherited IRA to American Century Investments. American
Century Investments invested half of the balance in an
"Ultra Fund" and half in a "Select Fund"
with the account titled as follows: "SSBT&T Cust for
the IRA Bene of Lynette S. Kapsinow as Bene of Miriam
the death of the debtor's mother, the debtor has
"had access to all of the funds in the Inherited IRA for
any reason, without penalty; could not make any further
contributions into the Inherited IRA; was required to take
minimum distributions from the Inherited IRA Account; and
must keep the Inherited IRA separate from any other accounts
she has, if any." Additionally, the agreed statement of
facts noted that "[t]he [d]ebtor has never made any
contributions to the Inherited IRA." As of March 31,
2017, the value of the inherited IRA was $94, 421.87.
April 12, 2018, the Bankruptcy Court certified to this Court
the question about the availability of an exemption in
bankruptcy with respect to the inherited IRA with which we
now contend. We are limited in our review to the legal
question which was certified to us.
a debtor may claim an exemption in an inherited Individual
Retirement Annuity, including one inherited from a
non-spouse, pursuant to R.I. Gen. Laws §
questions are questions of law; and, consequently, this Court
reviews them in a de novo manner. Mancini v.
City of Providence, 155 A.3d 159, 161 (R.I. 2017);
see also In re Tetreault, 11 A.3d 635, 639 (R.I.
2011). What is more, as we have consistently stated,
"this Court adheres to the de novo standard
when reviewing issues of statutory construction."