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Mary Beth Massillon and v. Lynne F. Riley, Chapter 7 Trustee

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Before Votolato, Lamoutte, and Tester, United States Bankruptcy Appellate Panel Judges.

Mary Beth Massillon (the “Debtor”) appeals from the bankruptcy court order (the “Order”) sustaining the Trustee’s objection to her claim of either the exclusion of, or the exemption in, her interest in a testamentary spendthrift trust (the “Trust”). She also appeals from the subsequent order denying reconsideration (the “Order Denying Reconsideration”). Because we conclude that the bankruptcy court erred in determining that the Debtor’s interest in the undisbursed income and corpus of the Trust were property of the estate subject only to her federal exemption, the Panel REVERSES the Order and REMANDS the matter for an order consistent with this opinion.

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