                                                        United States Court of Appeals
                                                                 Fifth Circuit
                                                              F I L E D
              IN THE UNITED STATES COURT OF APPEALS            August 6, 2003

                      FOR THE FIFTH CIRCUIT               Charles R. Fulbruge III
                                                                  Clerk


                            No. 02-50411




     IN THE MATTER OF: ELIZABETH ANN EVERT,


                                              Debtor.


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


     MARSHA G. MILLIGAN, TRUSTEE;
     C. DANIEL ROBERTS & ASSOCIATES P.C.,

                                              Appellants,


          versus


     ELIZABETH ANN EVERT,


                                              Appellee.


          Appeal from the United States District Court
                for the Western District of Texas



Before GARWOOD, SMITH and BARKSDALE, Circuit Judges.

GARWOOD, Circuit Judge:

     After Elizabeth Ann Evert (Evert) filed for bankruptcy under

Chapter 7 of the Bankruptcy Code, Appellant Marsha G. Milligan,
Trustee, (Milligan) was appointed trustee.          Milligan objected to

Evert’s attempt to claim as exempt property under 11 U.S.C. §

522(d)(10)(D) a $65,000 promissory note payable to her and executed

by her former husband which she had received pursuant to their

divorce.   The bankruptcy court found that the promissory note

constituted   “alimony,   support,       or   separate   maintenance”   and

therefore could be shielded from Evert's creditors under section

522(d)(10)(D).   The district court affirmed.        We reverse.

                          Proceedings Below

     Evert filed a voluntary petition for relief under Chapter 7 of

the Bankruptcy Code on March 26, 2001, and filed her amended

Schedules B & C on June 4, 2001.          The Chapter 7 Trustee timely

filed an objection to the Debtor's amended schedules.          On June 5,

2001, Evert moved the bankruptcy court to convert her case to a

Chapter 13 bankruptcy.     The Chapter 13 Trustee timely filed a

notice of intent to prosecute the Chapter 7 Trustee's objection.

After conducting a hearing and reviewing the record, the bankruptcy

court entered an Order on October 31, 2001, denying the Trustee's

Objection to Debtor's Amended Exemptions, as well as a Memorandum

Opinion.   After the Trustee timely filed a notice of appeal, the

district court on April 2, 2002, affirmed the bankruptcy court.

Milligan timely filed a notice of appeal to this court.

                                Facts

     On April 15, 1999, Evert and her then husband Keith Colvin


                                     2
were divorced pursuant to a judgment of divorce signed and entered

that day by the 345th Judicial District Court of Travis County,

Texas. The judgment is also signed “Agreed and Approved as to Form

And Substance” by Evert and Colvin, is entitled “Agreed Final

Decree of Divorce,” and includes the recitation that “[t]he parties

have agreed to the terms of this Decree and further stipulate that

the    provisions     for   division     of    assets   and    liabilities    are

contractual.”       The decree is divided into sections.

       In the section entitled “Child Support” Colvin is ordered to

pay Evert $1,000 a month for the support of their two minor

children (born in 1986 and 1988) until they become 18 (or die or

marry), with provision for reduction to $800 a month when there is

only one eligible child.         The child support payments are ordered

“made through the Travis County Domestic Relations Office . . . and

then   remitted     by   that   agency   to”    Evert   “for   support   of   the

children.”    Colvin is also ordered to provide and pay for health

insurance covering the children.

       A subsequent section of the decree divides the assets and

liabilities of the parties.         This section begins by stating:

            “THE COURT finds the following provisions regarding
       the parties’ assets and liabilities are contractual and
       enforceable as a contract. IT IS ORDERED AND DECREED
       that the estate of the parties, including both separate
       and community property, be divided as follows:

            Petitioner [Evert] is awarded the following as
       Petitioner’s sole and separate property, and Respondent
       [Colvin] is hereby divested of all right, title and
       interest, in and to such property.”


                                         3
Thereafter nine separately numbered paragraphs describe the various

assets awarded Evert including cemetery lots, the couple’s former

house, furniture and fixtures, and one of their automobiles.     The

last item in this list is the $65,000 note in question, described

in the list’s numbered paragraph 9 as follows:

     “A promissory note executed by Respondent, payable to
     Petitioner in the original principal sum of $65,000.00
     bearing interest at 8% per annum and payable in sixty
     (60) equal monthly installments of $1,317.97 each,
     including interest, with the first installment due and
     payable on May 1, 1999, and a like installment of
     $1,317.97 due on the 1st day of each succeeding
     thereafter until the note is paid in full.”

Immediately thereafter, the decree states:

     “Respondent [Colvin] is awarded the following as
     Respondent’s sole and separate property, and Petitioner
     [Evert] is hereby divested of all right, title, interest,
     and claim in and to such property.”

There then follow seven numbered paragraphs describing the property

awarded Colvin, including a described automobile and “[a]ny and all

interest in and to the business known as Colvin Automotive, Inc.”

The decree next provides that, “as a part of the division of the

estate of the parties,” Evert shall pay and hold Colvin harmless

from certain described debts, including the first and second liens

on their house awarded to Evert, and Colvin shall pay and hold

Evert harmless from certain described debts including “[a]ny and

all charges, debts, liens or other obligations arising from or

secured by property awarded to Respondent [Colvin] herein.”

     A still later section of the decree, entitled “Post-Divorce



                                 4
Spousal Support (Alimony) Agreement,” provides in relevant part as

follows:

     “Post-Divorce Spousal Support (Alimony) Agreement

          1.   Purpose and Intent of Agreement.     It is the
     mutual desire of the parties that . . . COLVIN
     (“Husband”) provide a continuing measure of support for
     [EVERT] (“Wife”) after divorce. These support payments
     are intended to qualify as alimony as that term is
     defined in Section 71 of the Internal Revenue Code of
     1954 (“the Code”), as amended, and are intended to be
     included in the gross income of Wife under Section 71 of
     the Code as amended, and deductible by Husband under
     Section 215 of the Code as amended. It shall include
     such payments in her gross income for federal and state
     income tax reporting purposes, and Husband shall deduct
     said payments from his gross income for federal and state
     income tax reporting purposes.

          2. Amount of Alimony. Husband shall pay to Wife
     monthly payments of alimony in the amount of $1,350.00
     per month, with the first payment in the amount of
     $1,350.00 being due and payable on May 1, 1999, and with
     like payment in the amount of $1,350.00 being due and
     payable on the same day of each month thereafter, until
     April 1, 2004, with the last payment being due and
     payable on said date, or on the date Wife dies, whichever
     date is earlier in time.

          3. Contractual Obligations. This support obligation
     undertaken by Husband is contractual in nature and is not
     an obligation imposed by order or decree of the Court.

           4. Termination. The amount of monthly alimony not
     yet accrued and then payable under this article shall
     terminate with the April 1, 2004, payment, or on the date
     Wife, dies, whichever date is earlier in time. There is
     no liability for Husband to make any payments accruing
     after the death of Wife, and there is no liability for
     Husband to make any payment in cash or property as a
     substitute for such payments accruing after the death of
     Wife.

     . . .

             6.   Nontransferability.   Neither the agreement to


                                   5
     pay alimony nor the right to receive alimony under this
     Article is assignable or transferable.”

     Colvin executed and delivered the $65,000 note to Evert and

thereafter made the monthly payments called for thereby.

     Evert declared bankruptcy on March 26, 2001.                           Milligan argued

that the $65,000 promissory note should be part of the debtor's

estate while Evert maintained the note is “support” exempt under 11

U.S.C. § 522(d)(10)(D).

                                  Standard of Review

     Findings of fact are reviewed under the “clearly erroneous”

standard; conclusions of law are subject to de novo review. Matter

of Midland Indus. Service Corp., 35 F.3d 164, 165 (5th Cir. 1994).

                                        Discussion

     By virtue of 11 U.S.C. § 522(d)(10)(D) a debtor may exempt

from his or her bankruptcy estate “(10) the debtor’s right to

receive . . . (D) alimony, support, or separate maintenance, to the

extent reasonably necessary for the support of the debtor and any

dependent of the debtor.”1                   The dispute in this case solely


     1
      Section 522, entitled “Exemptions,” provides in part as follows:

     “(b) Notwithstanding section 541 of this title, an individual debtor may exempt
     from property of the estate the property listed in either paragraph (1) or, in the
     alternative, paragraph (2) of this subsection. . . . Such property is –
             (1) property that is specified under subsection (d) of this section, unless the
             State law that is applicable to the debtor under paragraph (2)(A) of this
             subsection specifically does not so authorize; or, in the alternative,
             (2) . . .
             ...
     (d) The following property may be exempted under subsection (b)(1) of this

                                                6
involves whether the $65,000 note represents “alimony, support, or

separate maintenance,” and does not involve whether at the time of

Evert’s bankruptcy the note payments were reasonably necessary for

the support of Evert and her dependents.

     Because there is little precedent concerning what qualifies as

“alimony, support, or separate maintenance” under 11 U.S.C. §



     section:
             (1) . . .
             ...
             (10) The debtor’s right to receive –
                       (A) A social security benefit, unemployment
                       compensation, or a local public assistance benefit;
                       (B) a veterans’ benefit;
                       (C) a disability, illness, or unemployment benefit;
                       (D) alimony, support, or separate maintenance, to
                       the extent reasonably necessary for the support of
                       the debtor and any dependent of the debtor;
                       (E) a payment under a stock bonus, pension, profit-
                       sharing, annuity, or similar plan or contract on
                       account of illness, disability, death, age, or length of
                       service, to the extent reasonably necessary for the
                       support of the debtor and any dependent of the
                       debtor, unless –
                               (I) such plan or contract was
                               established by or under the auspices
                               of an insider that employed the
                               debtor at the time the debtor’s rights
                               under such plan or contract arose;
                               (ii) such payment is on account of
                               age or length of service; and
                               (iii) such plan or contract does not
                               qualify under section 401(a), 403(a),
                               403(b), or 408 of the Internal
                               Revenue Code of 1986.
             (11) . . .” (emphasis added).



                                                  7
522(d)(10)(D), the bankruptcy court and district court relied on

precedent interpreting 11 U.S.C. § 523(a)(5).      While section 522

governs exemptions of various assets and rights to income of the

debtor from the debtor’s bankruptcy estate, section 523 (entitled

“Exceptions to discharge”) governs what debts of the debtor may be

discharged in bankruptcy.    11 U.S.C. § 523(a) provides in relevant

part that:

     “A discharge . . . does not discharge an individual
     debtor from any debt –

     (1) . . .

     . . .

     (5) to a spouse, former spouse, or child of the debtor,
     for alimony to, maintenance for, or support of such
     spouse or child, in connection with a separation
     agreement, divorce decree or other order of a court of
     record, determination made in accordance with State or
     territorial law by a governmental unit, or property
     settlement agreement, but not to the extent that–

             (A) such debt is assigned to another entity,
             voluntarily, by operation of law, or otherwise
             (other than debts assigned pursuant to Section
             408(a)(3) of the Social Security Act [42 USCS
             § 608(a)(3)], or any such debt which has been
             assigned to the Federal Government or to a
             State or any political subdivision of such
             State); or
             (B) such debt includes a liability designated
             as alimony, maintenance, or support, unless
             such liability is actually in the nature of
             alimony, maintenance, or support;

     (6) . . .”

     The district and bankruptcy courts in this circuit have

generally looked to In Re Joseph, 16 F.3d 86 (5th Cir. 1994), and



                                   8
In Re Dennis, 25 F.3d 276 (5th Cir. 1994), for their interpretation

of 11 U.S.C. § 523(a)(5) and applied that standard to interpreting

11 U.S.C. § 522(d)(10)(D).    In Dennis and Joseph, it is stated that

in interpreting section 523(a)(5) courts will generally look beyond

the labels which state courts - and even parties themselves - give

obligations which debtors seek to have discharged.           This court in

Dennis and Joseph held that a nonexclusive list of factors that

should be considered in determining whether a Texas divorce related

obligation constitutes alimony, support, or maintenance is: “the

parties' disparity in earning capacity, their relative business

opportunities,   their   physical       condition,   their     educational

background, their probable future financial needs, and the benefits

each party would have received had the marriage continued.”          In Re

Dennis, 25 F.3d at 279; In re Joseph, 16 F.3d at 88.

     These factors were first outlined in In Re Nunnally, 506 F.2d

1024, 1027 (5th Cir. 1975).    In Nunnally, this court held that the

obligation to make a lump sum payment and pay attorney's fees of

the former spouse contained in a divorce settlement were alimony or

support and therefore were not dischageable. Noting that Texas did

not have alimony at the time, this court in Nunnally observed that

the equitable distribution of property is accordingly often used in

Texas as a substitute to compensate for the difference in earnings

between husband and wife.     The Nunnally court explained:

     “Although there is no permanent alimony in Texas, Francis

                                    9
     v. Francis, 412 S.W.2d 29, 32 (Tex. 1967), the divorce
     court is authorized at the time of the divorce to divide
     the separate and community property between the spouses
     in whatever manner the court deems equitable and just.
     Tex. Family Code Ann. § 3.63. Factors which the Texas
     courts may take into account in making the division and
     award ‘include the disparity of the earning power of the
     parties, as well as their business opportunities, . . .
     the physical condition of the parties, probable future
     need for support, and educational background; . . . [t]he
     fault in breaking up the marriage and the benefits
     innocent spouse would have received from a continuation
     of the marriage . . ..’ Cooper v. Cooper, 513 S.W.2d
     229, 233-234 (Tex.Civ.App.--Houston [1st Dist.] 1974,
     writ history unknown) (emphasis added). See also Keton
     v. Clark, 67 S.W.2d 437 (Tex.Civ.App.--Waco 1933, writ
     ref'd). Thus, it is clear support in the future can play
     a significant role in the divorce court's property
     division and that what may appear to be a mere division
     of assets may in fact, under a Texas decree, contain a
     substantial element of alimony-substitute, support or
     maintenance, however termed.”

Nunnally at 1026-27 (emphasis added).

     In Matter of Benich, 811 F.2d 943 (5th Cir. 1987), this court

applied those very same criteria in determining that payments made

by a man to his former wife under a Texas property settlement

agreement were, despite the title of the agreement, in reality

support and therefore could not be discharged in bankruptcy.                     In

Dennis and Joseph, this court used the same list of factors

enumerated in Nunnally and Benich in making this determination

except   the    fault   in   breaking    up   the    marriage,   which    is    not

mentioned in Dennis or Joseph.          In effect, this court has applied

the factors Texas courts use in determining what is an equitable

division   of    property    upon   divorce     to    the   question     of    what



                                        10
constitutes      alimony,    support,        or    maintenance   under    section

523(a)(5).

     Applying the Nunnally factors, including fault in breaking up

the marriage, the bankruptcy court here concluded that the $65,000

promissory note payments were support under section 522(d)(10)(D).

The bankruptcy court emphasized that Evert lacks a college degree

or vocational training, had not worked outside the home since 1986,

and has a monthly mortgage payment on the house she received of

approximately $1,900.         The record indicates that the couple's

income   while     married    was    almost        exclusively   from    Colvin's

automobile business built during their marriage, with which Evert

had helped out some. That business had produced between $6,000 and

$8,000 of income per month.         The lower courts cited these facts as

illustrative of the difference in the parties' earning capacity,

business opportunities, need for future support, and the benefits

they would have received had the marriage continued.

     The bankruptcy court, however, made one important clearly

erroneous finding of historic fact.               The court stated, “It is also

instructive that under the Divorce Decree, although the payments

under the Note are labelled as 'property settlement,' they are to

last as long as the Alimony payments.               Both payments cease on the

earlier of five years or the Debtor's death.”               Milligan correctly

asserts that this finding is clearly erroneous, as the Decree

actually states that the note payments are to continue “until the



                                        11
note is paid in full.”      Therefore, one of the factors that the

bankruptcy court cited for construing the note obligation in

question as alimony actually points toward classifying it as part

of the property settlement.

     Milligan also argues that the bankruptcy court applied the

wrong law because the Nunnally factors used to define alimony,

support,   and   maintenance    in   the   discharge    context    are    not

applicable to the interpretation of the exemption under 11 U.S.C.

§ 522(d)(10)(D), especially when, as Milligan asserts in the case

here, the parties' intent at the time of their agreement is clear

and unambiguous. Milligan observes that the record in the case sub

judice shows: 1) under one section of the decree Evert receives a

monthly payment of $1,000 for child support, 2) another, separate

section of the decree additionally provides for the note from

Colvin to Evert, 3) under still another, separate section of the

decree Evert additionally receives a monthly payment of $1,350 for

alimony, 4) the payments under the note do not cease on the

Debtor's remarriage or death, but the alimony payments expressly

cease on Evert's death, 5) the note may be transferred or assigned

by the Debtor while the alimony payments are expressly made non-

assignable and non-transferrable, 6) the note is not subject to

being modified upon any subsequent change of circumstances of the

parties, and 7) the note closely equalized the division of the two

major   components   of   the   parties'   marital     property.     It   is


                                     12
undisputed that the note at issue was in the section of the

agreement expressly dealing with the property division and that a

wholly separate section was expressly devoted to alimony.

      The threshold question is whether the same approach this

circuit has used for determining what constitutes alimony in the

context of dischargeability under 11 U.S.C. § 523(a)(5) should

apply to exemptions under 11 U.S.C. § 522(d)(10)(D).             As we have

not heretofore considered this question, the bankruptcy court

relied on In re Ellertson, 252 Bankr. 831, 833 (Bankr. S.D. Fla.

2000)   (“This    Court   believes   that,   for    the   purposes    of   both

dischargeability and exemptions, a bankruptcy court may look behind

a label applied by a state court to ascertain the true nature of an

award”); In re Sheffield, 212 Bankr. 1019, 1020-21 (Bankr. M.D. Fla

1997) (“Logic dictates that what constitutes alimony for purposes

of Section 523(a)(5), and what constitutes alimony for purposes of

Section 522(d)(10)(D), should involve the same criteria”); and In

the Matter of Joseph, 157 Bankr. 514, 518 (Bankr D. Conn. 1993)

(“There is no readily apparent reason why a bankruptcy court should

use   different    standards   in    reviewing     alimony   awards   in    the

nondischargeability instance and in the exemption instance.                The

overarching principle is that the primacy of the bankruptcy laws

may not be subverted by labels placed on obligations by the parties

themselves or by nonbankruptcy courts”).

      In In re Harbaugh, 257 Bankr. 485, 489 (E.D. Mich. 2001), the


                                      13
court concluded that it “is unable to find any empirical basis upon

which to   reach   a   definite   conclusion   as   to    whether   Congress

intended for the alimony provisions of sections 522 and 523 to

directly parallel one another.”      The Harbaugh court concluded that

section 522 exempts any payments from the bankruptcy estate that 1)

are intended by the parties or the state court to support a spouse

and 2) are, in the judgment of the bankruptcy court, reasonably

necessary for such purpose.       Harbaugh at 491.       Harbaugh also held

that the labels that the parties or nonbankruptcy courts place on

an obligation are not dispositive and should not be allowed to

subvert the bankruptcy laws. The bankruptcy court here also relied

on this circuit's holdings recognizing Texas' courts use of a

liberal construction when interpreting state exemption statutes.

Matter of Walden, 12 F.3d 445 (5th Cir. 1994); Matter of Volpe, 943

F.2d 1451 (5th Cir. 1991).    “A review of the legislative history of

11 U.S.C. § 522 . . . reveals no intention on the part of Congress

to depart from the well-accepted general approach to construing

exemption statutes liberally in favor of debtors.”           In re Coleman,

5 Bankr. 76, 79 (Bankr. M.D. Tenn. 1980).

     The bankruptcy court correctly observed that nearly all the

courts that have considered the question have determined that the

same interpretation given to 11 U.S.C. § 523(a)(5) should also be

applied to 11 U.S.C. § 522(d)(10)(D).      We note, however, there are

several arguments against this.


                                    14
      First,    qualifying      language        that   exists     in   11   U.S.C.     §

523(a)(5) is not found in 11 U.S.C. § 522(d)(10)(D).                   A phrase that

is   present    in   section    523(a)(5)        but   is   absent     from      section

522(d)(10)(D) is “unless such liability is actually in the nature

of alimony, maintenance, or support.” The statutes may also differ

somewhat   in    their      underlying      purpose.        A    liberal    or    broad

interpretation of “alimony” may be particularly appropriate under

section 523(a)(5) because of the desire to avoid harming someone

who is completely innocent and depends on their former spouse for

their support (and often for their children's support as well)

because of the bankruptcy of that former spouse.                    Moreover, there

is an incentive on the part of the debtor in the dischargeability

context to try to characterize the obligation as something other

than support so it can be discharged.               In contrast, in the section

522(d)(10)(D) context, the person seeking the exemption is the

individual who has taken                 bankruptcy so there is an arguable

element of fault and there is no incentive to hurt an innocent

third party, except perhaps the creditor. In the section 523(a)(5)

context, the need to look beyond the labels may stem from the fact

that the obligated party has an incentive to craft the agreement to

disguise   support     as    part    of    a    property    settlement      so    it   is

dischageable.        However,       in    the   exemption       context    of    section

522(d)(10)(D), the incentive would be with the obligee party

receiving what is actually a property settlement to disguise it as



                                           15
support so it is sheltered in bankruptcy.   We also note that in the

section 523(a)(5) context the interests of the debtor and former

spouse in the proceedings before the bankruptcy court are virtually

always adverse, while in the section 522(d)(10)(D) context they are

likely to be aligned against the third party creditor.     Therefore,

in the latter context it becomes more than normally questionable to

rely on oral testimony of the spouse and former spouse as to their

prior subjective intent with respect to the character of the

indebtedness where that testimony runs counter to the clear purport

of the relevant documents, which were likely all that would have

been available to a third party extending credit.

     We also observe that in 1994 Congress amended section 523, but

without a parallel amendment to section 522, creating 11 U.S.C. §

523(a)(15), which precludes discharge of obligations:

     “(15) not of the kind described in paragraph (5) that is
     incurred by the debtor in the course of a divorce or
     separation or in connection with a separation agreement,
     divorce decree or other order of a court of record, a
     determination   made   in  accordance   with   State  or
     territorial law by a governmental unit unless–

          (A) the debtor does not have the ability to
          pay such debt from income or property of the
          debtor not reasonably necessary to be expended
          for the maintenance or support of the debtor
          or a dependent of the debtor and, if the
          debtor is engaged in a business, for the
          payment of expenditures necessary for the
          continuation, preservation, and operation of
          such business; or
          (B) discharging such debt would result in a
          benefit to the debtor that outweighs the
          detrimental consequences to a spouse, former
          spouse, or child of the debtor.”


                                16
       The fact that Congress saw a need to add this provision to

section 523 strongly suggests that the language in section 523

(a)(5) does not cover obligations incurred as part of a property

division incident to divorce.                  The existence of this new provision

suggests Congress envisioned that there would be other types of

payments authorized in divorce agreements that would not qualify as

alimony,       maintenance,         or    support.          That     a   parallel       to    this

provision was not also appended to section 522 may also suggest a

congressional intent not to have a scheme of exemptions as broad as

the scheme of discharge disallowance in respect to obligations to

former spouses arising in the divorce context.

       We do not find it necessary to decide today whether the

Nunnally factors that apply to section 523(a)(5) should also be

applied to section 522(d)(10)(D), or indeed the weight to be

assigned these factors given that Texas now has an alimony statute

or, as is the case here, where the agreement being interpreted was

reached through settlement, thereby making the state limitations on

alimony largely irrelevant.2                    We hold only that, at least for

purposes of section 522(d)(10)(D), where in the agreed divorce



       2
         In 1997 Texas amended its statutes to for the first time provide for court ordered post-
divorce spousal maintenance (in a relatively narrow range of circumstances) and also to provide
for the first time for enforcement by contempt of contractual agreements between the divorcing
spouses, approved by the divorce court, for post-divorce spousal maintenance payments. These
provisions are now codified at §§ 8.051-8.059, Texas Family Code. A Texas divorce court may
approve an agreement of the parties and incorporate it in the decree if it finds the agreement “just
and right.” Texas Family Code § 7.006(b).

                                                 17
decree there is 1) also a meaningful separate alimony provision, 2)

the obligation in question is described as being part of the

property division, 3) the label given to the obligation in question

is matched by its actual characteristics, and 4) the evidence does

not suggest the parties conspired to disguise the true nature of

the obligation in order to subvert the bankruptcy or tax laws,

there is no ambiguity necessitating the use of the Nunnally factors

to essentially work backwards to determine the nature of the

obligation.   Because we conclude that that is the situation here,

we reverse.

     Under bankruptcy law, the intent of the parties at the time a

separation agreement is executed determines whether a payment

pursuant to the agreement is alimony, support or maintenance within

the meaning of section 523(a)(5).      See generally In re Davidson,

947 F.2d 1294, 1296-97 (5th Cir. 1991); In re Gianakas, 917 F.2d

759, 762 (3d Cir. 1990).     A written agreement between the parties

is persuasive evidence of their intent. Tilley v. Jessee, 789 F.2d

1074, 1077 (4th Cir. 1986).      Thus, if the agreement between the

parties clearly shows that the parties intended the particular debt

in question to reflect either support or a property settlement,

then that characterization will normally control. In re Yeates, 807

F.2d 878 (10th Cir. 1986).    On the other hand, if the agreement is

ambiguous, then the court must determine the parties' intentions by

looking to extrinsic evidence. Id.        If an agreement fails to


                                  18
provide explicitly for spousal support, a court may presume that a

so-called "property settlement" is intended for support when the

circumstances of the case indicate that the recipient spouse needs

support. Stout v. Prussel, 691 F.2d 859, 861 (9 Cir. 1982); Shaver

v. Shaver, 736 F.2d 1314, 1316 (9th Cir. 1984) (J.M. Wisdom, J.,

sitting by designation).

     Yeates, Tilley, Stout, and Shaver are instructive. Here, both

the labels given to the obligation at issue in the agreement and

the substantive characteristics of the obligation clearly reflect

it is part of a property settlement. Furthermore, because there is

an explicit, separate provision for nontrivial alimony in the

agreement, there is no basis for judicially refashioning the note

contained in the property settlement portion of the agreement as

alimony.    In Yeates, the court noted, “The agreement between the

parties in the present case does not provide clear evidence of

intent.     Unlike the agreement in Tilley, it does not clearly

segregate the property settlement provisions from the alimony

provisions.”    Yeates at 878-79.      This is indicative of the extent

to which the existence of separate provisions is probative of the

parties' intent at the time of the agreement.

     In    addition   to   the   separate   provisions   for   alimony   and

property     division,     there    are     several   other    substantive

characteristics of the note that reinforce its designation as part

of the property division.        First, payments under the note do not


                                     19
cease on the Debtor's death while the alimony payments do.                  One

hallmark of a support obligation is that it terminates upon death.

In re Ferradino, 14 Bankr. 196, 198 (Bankr. D.Nev. 1981); In re

Ingram, 5 Bankr. 232, 235 (Bankr. N.D.Ga. 1980). It is obvious that

a payment solely to provide maintenance and support would no longer

be warranted after the death of the beneficiary.              Also, while the

alimony payments in the agreement are explicitly non-assignable and

non-transferrable, there is no provision limiting the ability of

Evert to dispose of the note (and it is hence assignable as a

matter of law).      In addition, the note is not subject to being

modified   upon    any   subsequent   change    of   circumstances     of   the

parties.   One characteristic indicative of alimony is that it is

normally subject to modification if the beneficiary no longer needs

the support while one sign that an obligation is part of a property

division is that it is not altered by a change in the circumstances

of the beneficiary.       In re Benjamin, 136 Bankr. 574, 578 (Bankr.

S.D. Fla. 1992).

     Finally, the note equalized the division of the two major

components of the parties' marital property.            The bankruptcy court

found that   the    testimony   indicated      Colvin   had   equity   in   his

business of $230,000 while there was approximately $100,000 equity

in the home.       Therefore, the note in the principal amount of

$65,000 was exactly half of the $130,000 difference, thereby

equalizing the property division. While there was some conflicting


                                      20
evidence in the bankruptcy court on the value of the business, the

bankruptcy court concluded the equity in it was $230,000 and Evert

does not challenge that finding on appeal. Similarly, the court in

Benjamin cited evidence that a payment to a spouse was designed to

offset the other spouse's interest in a business as being one

factor indicating the payment was part of the property division

rather than alimony.     Benjamin at 578.

     The only characteristic of the note that would suggest it

would be   properly    classified   as   alimony   is   that   it   provides

payments over time, rather than one lump sum payment.           Bowsman v.

Morrell (In re Bowsman), 128 Bankr. 485, 487 (Bankr. M.D. Fla.

1991). However, this factor is not dispositive and, where there is

evidence the obligation, bearing (as it does here) a realistic rate

of interest, was spread out over time for legitimate reasons, such

as for convenience, it tends to be a factor favoring classification

of the obligation as part of the property settlement.                 In re

Brackett, 259 Bankr. 768, 775 (Bankr. M.D. Fla. 2001).                Here,

Colvin’s undisputed testimony is that the reason for spreading out

the payments in the form of the note instead of making a lump sum

payment was convenience.    The testimony of the parties in this case

as to their intent is not entirely conclusive, but it provides some

reinforcement for the conclusion that the note was part of the

property settlement.    Colvin testified that, from his perspective,

the purpose of the note was to equalize the property distribution


                                    21
because the house Evert received was worth significantly less than

the business he kept.               While Colvin also stated that he thought

that Evert needed the payments on the note for her living expenses,

this of itself is not meaningfully probative of his relevant intent

at the time of the agreement.                  Under the clear language of section

522(d)(10)(D), the obligation must                        first be determined to be

“alimony, support, or separate maintenance” and, if so, then it is

exempt “to the extent reasonably necessary for the support of the

debtor and any dependent of the debtor.”                              Therefore, Colvin's

testimony and other evidence indicating Evert needs the payments on

the note to pay her expenses has ultimate relevant only if the note

constitutes “alimony, support, or separate maintenance.”

       Colvin's testimony that the intent of the note was to equalize

the property division is particularly credible in light of his

statement that he would prefer that Evert be able to exempt the

note from the bankruptcy proceedings since she has custody of his

child.      It does not appear that Colvin had any motive to testify

that the note was part of the property division when it was not.3

       For her part, Evert testified that she only “skimmed” the

agreed judgment.            She stated that she knew that it provided for

spousal support, child support, and contained this note, but did


       3
        In addition, in order for alimony to be deductible by the payor under federal income tax
laws, such payments must terminate upon the payee's death. 26 U.S.C. § 71. It did not serve
Colvin's financial interest in terms of his federal tax burden to classify the note as part of the
property division.


                                                 22
not attend to the characteristics of the note.       Evert further

testified that she did not have an attorney in the divorce and

largely trusted and deferred to Colvin with regard to the terms of

the agreement. In short, it appears Colvin's clear intent was that

the note was, as the agreement states, to be part of the property

division while Evert did not form an intent as to the note.

Therefore, the testimony of the parties to the agreement partially

supports the conclusion that the note was part of the property

division and does not demonstrate either party had an intent

contrary to the written agreement, which provides “persuasive

evidence of intent,” Yeates at 878, and "erected a substantial

obstacle” for the party challenging its express terms to overcome,

Tilley at 1078.    There is no evidence that the parties sought to

disguise the true nature of the note or other obligations in the

agreement in order to subvert the bankruptcy laws or for any other

reason.   And there is no evidence that at the time of the divorce

either party anticipated or considered the possibility of going

into bankruptcy.

     In sum, the bankruptcy court in this case made an error of law

in prematurely resorting to the Nunnally factors.     The Nunnally

factors are, of course, binding law within this circuit at least as

to 11 U.S.C. § 523(a)(5), but we have never applied them in a

situation such as this where the written agreement and divorce

decree in both form and substance clearly establish the nature of


                                 23
the    obligation        and    where      there     are     distinct       provisions        for

nontrivial alimony and for the property settlement.                             In contrast,

Nunnally and its progeny have involved the interpretation of Texas

divorce “just and right” divisions before the advent of alimony in

Texas where, by necessity, all obligations ordered were grouped

together as part of the property division.4

       As this court has not had the opportunity prior to the case

sub judice to consider a situation where the written agreement in

both form and substance clearly establishes the nature of the

obligation and where there are distinct provisions for nontrivial

alimony and for the property division, we find that Yeates, Tilley,

Stout, and Shaver are persuasive.                       In the present context, the

approach of those cases provides guidance for divorce courts and

parties entering into divorce agreements and avoids unnecessary

subsequent subjective judicial determinations of extrinsic factors

where the judgment and/or agreement is unambiguous.                             And, in such

a context the approach we take minimizes the risk that what the

parties and the divorce court unambiguously intended as a division

of property may be recharacterized by the bankruptcy court as

alimony merely because of its determination that in effect the

parties and divorce court should have made or required provision

for an amount of alimony greater than the nontrivial amount thereof


       4
         Likewise, Harbaugh is inapposite because the court there relied on the fact that the
obligation at issue was classified in the agreement as alimony and terminated upon death, neither
of which is the case here.

                                                24
specifically called for by the decree and the agreement of the

parties.

       The bankruptcy court cited this court's decisions in Matter of

Walden, 12 F.3d 445 (5th Cir. 1994), and Matter of Volpe, 943 F.2d

1451 (5th Cir. 1991), recognizing that Texas state courts broadly

construe bankruptcy exemptions to help the debtor and relied on In

re Coleman, 5 Bankr. 76, 79 (Bankr. M.D. Tenn. 1980), for the

proposition that “[a] review of the legislative history of 11

U.S.C. § 522 . . . reveals no intention on the part of Congress to

depart      from    the    well-accepted          general      approach       to   construing

exemption statutes liberally in favor of debtors.” However, Walden

and Volpe are not controlling here because here it is the federal

exemption that is at issue.                 We find it unnecessary to determine

whether       this circuit should also liberally construe 11 U.S.C. §

522(d)(10)(D) because, under any reasonable construction, the note

at issue is properly classified as part of the property division.

We think it plain that section 522(d)(10)(D) is not intended to

embrace payments or transfers made simply to equalize the division

of    the    spouses’        existing       property.5           Where,      as    here,      the

unimpeached        relevant        documents         unambiguously        reflect       that     a

particular payment is part of the division of the existing property


       5
         This is also evidenced by § 523(a)(15) which reflects Congressional recognition that there
are inter-spousal payment obligations arising out of but continuing after divorce which are not
alimony, support or maintenance and which thus do not fall within § 523(a)(5), and, by
implication, do not fall within § 522(d)(10)(D).

                                                25
and   that   separate   provision   is   made   for   nontrivial   alimony

payments, the former obligation may not be post-hoc recharacterized

in bankruptcy as alimony or support under section 522(d)(10)(D)

simply on the basis of a finding that the obligee spouse also had

need of the former payments for support.

                              Conclusion

      For the foregoing reasons, the bankruptcy court's judgment

that the note at issue constituted spousal support under 11 U.S.C.

§ 522(d)(10)(D), and the district court’s affirmance of that

judgment, are

                               REVERSED.




                                    26
