The Debtor, 71 years old, was married until her husband died in 1999. At the time of his death, he was the sole owner of a house and land, purchased in 1962, with a mortgage signed by both the Debtor and her husband, and which the Debtor later inherited, pursuant to his will. Upon filing bankruptcy, the Debtor sought to claim the increased “widow’s” exemption of $60,000 in the property, based on N.C.G.S. § 1C-1601(a)(1), which in addition to the regular $35,000 homestead exemption, which provides that heightened amount “so long as the property was previously owned by the debtor as a tenant by the entireties or as a joint tenant with rights of survivorship and the former co-owner of the property is deceased.” The Trustee objected as there was no evidence that the Debtor was an owner of the real property prior to her husband’s death.
Starting from Mims v. Mims, 305 N.C. 41, 286 S.E.2d 779 (N.C. 1982), the bankruptcy court held that “when a spouse provides the consideration to purchase property in the name of the other spouse, the property is presumed to be a gift to the spouse in whose name the property is titled, regardless of whether the husband or the wife furnished the consideration.” This presumption was, however, rebutted in the present case by the Debtor’s testimony that the house was purchases as their family home, that her payments on the mortgages were not intended as a gift to her husband, and the Debtor continued paying for and maintaining the property following her husband’s death, as she had prior to his passing. Further, Mims was not exactly on point as here the Debtor and her husband had jointly been liable on the mortgages, indicating a desire for the property to be Tenancy by the Entireties, whereas in Mims only the non-owner spouse liable for the mortgages. Accordingly, the exemption was allowed.
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