6.3.g Discharged In Prior Bankruptcy

• Jurisdiction: United States

g. What is not property of the estate?

Section 541 of the Bankruptcy Code defines what property of the estate is, but also describes certain limited exceptions.

Property of the estate does not include any power that the debtor may exercise solely for the benefit of an entity other than the debtor11 U.S.C. § 541(b)(1).

Pursuant to §541(c)(2) a recognized retirement plan containing restrictions against transfer (anti-alienation or "spend-thrift" clauses) has been held not to be property of the estate. An ERISA qualified retirement plan, for example, is not property of the estate. See: 11 U.S.C. § 541(c)(2); In re Goff, 706 F.2d 547 (5th Cir. 1983); Patterson v. Shumate, 112 S.Ct. 2242 (1992); In re Meinen, 228 B.R. 368 (Bankr. W.D. Pa. 1998); In re Rich, 197 B.R. 692 (Bankr. N.D. Okla. 1996); In re Conner, 165 B.R. 901 (9th Cir. BAP 1994); In re Graham, 726 F.2d 1268, 1273 (8th Cir. 1984); In re Goff, 706 F.2d 574, 580 (5th Cir. 1983); In re Di Piazza, 29 B.R. 916, 918 (Bankr. N.D. Ill. 1983); In re Klayer, 20 B.R. 170, 272 (Bankr. W.D. Ky. 1981); In re Kelleher, 12 B.R. 896, 897 (Bankrt. W.D. Fla. 1981); In re Switzer, 146 B.R. 1, 3 (Bankr. C.D. Cal. 1992); In re Lucas, 924 F.2d 597 (6th Cir. 1991); In re Moore, 907 F.2d 1476 (4th Cir. 1990); In re Threewitt, 24 B.R. 927 (Bankr. D. Kan. 1982); In re Kincaid, 917 F.2d 1162 (9th Cir. 1990) (401(k) plan was a spendthrift trust and therefore not property of the estate).

In Shumate, the court held that an ERISA-qualified plan, which contains an anti-alienation provision, constitutes an enforceable transfer restriction...