In re: McKee
Facts: A couple purchases a home and vest title as co-owners. They later separate. One co-owner vacates the property and contributes nothing to the maintenance, insurance and property taxes while using a new address for driver’s license and voting records. The non-occupying co-owner, experiencing financial difficulties, files for bankruptcy protection and seeks an automatic homestead exemption for the co-ownership interest, stating they intend to move back into the home once the other co-owner vacates. The bankruptcy trustee objects to the homestead exemption filing.
Claim: The non-occupying co-owner claims they qualify for the automatic homestead exemption since they intend to move back into the home when the occupying co-owner vacates.
Counterclaim: The bankruptcy trustee claims the co-owner does not qualify for the homestead exemption since they offer no evidence they intend to retake possession of the property.
Holding: A federal appeals court for the 9th district covering California holds the non-occupying co-owner does not qualify for automatic homestead exemption in bankruptcy since no evidence exists supporting the non-occupying co-owner’s intent to re-occupy the property. [In re Mckee (9th Cir. 2024) 90 F4d 1244]
