United States Bankruptcy Appellate Panel
                           For the Eighth Circuit
                       ___________________________

                                No. 18-6018
                       ___________________________

                             In re: Brian A. Lerbakken

                                       Debtor.

                             ------------------------------

                                Brian A. Lerbakken

                                Debtor – Appellant,

                                          v.

                          Sieloff and Associates, P.A.

                             Interested Party - Appellee


                                   ____________

                  Appeal from United States Bankruptcy Court
                     for the District of Minnesota - Duluth
                                 ____________

                        Submitted: September 21, 2018
                           Filed: October 16, 2018
                               ____________

Before SCHERMER, NAIL and SHODEEN, Bankruptcy Judges.
                           ____________

SHODEEN, Bankruptcy Judge,
      The Debtor, Brian Lerbakken, appeals the bankruptcy court’s1 Order dated
May 29, 2018 disallowing his claimed exemptions in a Wells Fargo 401K and an
IRA account.


                                  BACKGROUND
       In September 2014 Lerbakken retained Sieloff & Associates, P. A. (Sieloff)
to represent him in his divorce proceeding in Lake County, Minnesota. The state
court’s order dissolving the marriage adopted the parties’ stipulated property
settlement which awarded Lerbakken one-half of the value in his ex-wife’s Wells
Fargo 401K and an entire IRA account (Accounts). The order directed counsel to
submit a Qualified Domestic Relations Order related to these assets. Based upon
the available record, the briefing and representations of counsel this was not
accomplished and Lerbakken has undertaken no other action to obtain title or
possession of the accounts.


      Lerbakken filed a voluntary Chapter 7 petition on January 23, 2018. His
Schedule C claimed the Accounts as exempt retirement funds for the values agreed
to under the property settlement. Sieloff was listed as a creditor for its unpaid fees.
It objected to Lebarkken’s claim of exemption in the Accounts. The bankruptcy
court disallowed the exemption on the basis that the Accounts were not retirement
funds as defined by Clark v. Rameker, 

(2014). This appeal
followed.




1
 The Honorable Robert J. Kressel, Judge, United States Bankruptcy Court for the
District of Minnesota.
                                           2
                                STANDARD OF REVIEW
      Whether Lerbakken is entitled to claim of an exemption in the Accounts
presents a question of law which is subject to de novo review. Rucker v. Belew (In
re Belew), 588 B.R, 875, 876 (B.A.P. 8th Cir. 2018).


                                        DISCUSSION
      As permitted, Lerbakken elected to use federal law in support of his claim of
exemption in the identified Accounts. Whether a claim of exemption is proper
begins with the relevant statutory authority which states: “Retirement funds to the
extent that those funds are in a fund or account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of
1986.” 11 U.S.C. §522(d)(12)(2018).2 Lerbakken contends that his interest in the
Accounts satisfies this statutory definition because the proceeds are not taxable to
his ex-wife and this status inures to his benefit.


      The parties supply extensive arguments related to the potential tax
consequences, penalties and ERISA provisions applicable to the Accounts.
Standing alone, these issues are not dispositive of their exempt status. 11 U.S.C.
§522(d)(12) contains two requirements: (1) that the amount must be retirement
funds; and (2) that the retirement funds must be in an account that is exempt from
taxation under one of the provisions of the Internal Revenue Code set forth therein.
Rice v. Allard (In re Rice), 

, 280 (E.D. Mich. 2012). In order for the
Accounts to be exempt both of these elements must be established.



2
 The Debtor identifies 11 U.S.C. §522(b)(3)(C) in support of the exemptions. That
provision contains language identical to 11 U.S.C. §522(d)(12) but does not
actually grant the exemption.
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      In Clark v. Rameker, 

(2014) the Supreme Court considered
whether an inherited IRA qualified as a retirement fund for purposes of exemption
under federal law. The Court’s unanimous ruling first addressed the definition of
retirement funds.
              The Bankruptcy Code does not define “retirement funds,” so we
              give the term its ordinary meaning. The ordinary meaning of
              “fund[s]” is “sum[s] of money . . . set aside for a specific purpose.”
              And “retirement” means “[w]ithdrawal from one’s occupation,
              business, or office.” Section 522(b)(3)(C)’s reference to
              “retirement funds” is therefore properly understood to mean sums
              of money set aside for the day an individual stops working.

    The opinion clearly suggests that the exemption is limited to
individuals who create and contribute funds into the retirement account.
Retirement funds obtained or received by any other means do not meet this
definition.


      In an attempt to meet the standard enunciated in Clark, Lerbakken asserts
the 401K and IRA represent marital property that his ex-wife saved for their joint
retirement. He further states that he intends to use the proceeds of the Accounts for
support upon his retirement. Courts are not required to address these subjective
considerations in determining the exemption issue.

              To determine whether funds in an account qualify as
              “retirement funds,” courts should not engage in a case-
              by-case, fact-intensive examination into whether the
              debtor actually planned to use the funds for retirement
              purposes as opposed to current consumption. Instead,
              [Courts should] look to the legal characteristics of the
              account in which the funds are held, asking whether, as
              an objective matter, the account is one set aside for the
              day when an individual stops working.

                                                4
      We recognize that Lerbakken’s interest in the 401K and IRA did not arise in
the identical manner as the IRA account addressed in Clark. This distinction is not
material to our de novo review. Any interest he holds in the Accounts resulted
from nothing more than a property settlement. Applying the reasoning of Clark
the 401K and IRA accounts are not retirement funds which qualify as exempt
under federal law.


      The bankruptcy court’s Order is AFFIRMED.
                         _________________________




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