                             In the

    United States Court of Appeals
                For the Seventh Circuit

Nos. 13-1123 & 13-1516

IN RE: LEONARD D. BRONK,
                                                             Debtor.
JOHN M. CIRILLI, Trustee,
                              Plaintiff-Appellee/Cross-Appellant,

                               v.

LEONARD D. BRONK,
                            Defendant-Appellant/Cross-Appellee.


           Appeals from the United States District Court
                for the Western District of Wisconsin.
       No. 11-cv-172-wmc — William M. Conley, Chief Judge.



  ARGUED SEPTEMBER 19, 2013 — DECIDED JANUARY 5, 2015



   Before MANION, KANNE, and SYKES, Circuit Judges.
   SYKES, Circuit Judge. This bankruptcy appeal raises two
questions of first impression under a Wisconsin statute that
permits resident debtors to shield certain property from
execution by creditors. See generally 11 U.S.C. § 522(b); WIS.
2                                         Nos. 13-1123 & 13-1516

STAT. § 815.18. The first question concerns the scope of the
statutory exemption for state-qualified college savings ac-
counts. See WIS. STAT. § 815.18(3)(p) (exempting “[a]n interest
in a college savings account under s. 16.641”). The bankruptcy
judge read the statute narrowly to cover only the interest of
account beneficiaries, not account owners, and refused to allow
the debtor to exempt from his bankruptcy estate five college
savings accounts he had established for the benefit of his
grandchildren. The district court affirmed this ruling, and the
debtor appeals this aspect of the judgment.
     Wisconsin’s exemption statute also protects certain retire-
ment benefits, see id. § 815.18(3)(j), as well as life-insurance and
annuity contracts, see id. § 815.18(3)(f). But the exemption for
life insurance and annuities is limited to $4,000 if the contract
in question was issued less than 24 months before the exemp-
tion is claimed. Id. § 815.18(3)(f)3. The debtor purchased an
annuity just a few months before filing his bankruptcy petition
and claimed a full exemption for it under section 815.18(3)(j).
The Chapter 7 trustee argued that the annuity didn’t qualify as
a “retirement benefit” under section 815.18(3)(j) and the debtor
could claim only the $4,000 exemption allowed under
section 815.18(3)(f)3. The bankruptcy judge rejected the
trustee’s argument, classified the annuity as a retirement
benefit, and allowed the exemption in full. The district court
affirmed, and the trustee cross-appeals this aspect of the
judgment.
   We reverse in part and affirm in part. The college savings
accounts are exempt from execution under section 815.18(3)(p).
Account owners, not just account beneficiaries, may claim this
Nos. 13-1123 & 13-1516                                          3

exemption, and the lower courts erred in disallowing it here.
As for the annuity, the contract in question satisfies the basic
definition of an exempt “retirement benefit” under
section 815.18(3)(j)1, which broadly includes “[a]ssets held or
amounts payable under any … annuity … or similar plan or
contract providing benefits by reason of age, illness, disability,
death, or length of service.” The debtor’s annuity provides a
death benefit, so the lower courts properly allowed him to
exempt it in full under section 815.18(3)(j).
     We note, however, that to qualify as a fully exempt retire-
ment benefit under section 815.18(3)(j), the plan or contract in
question must be either employer sponsored or comply with
the Internal Revenue Code. See § 815.18(3)(j)2. The annuity
clearly is not employer sponsored; whether it complies with
the Internal Revenue Code has not been established, but the
trustee raised this issue far too late in the proceedings and so
it is waived.


                         I. Background
    Leonard Bronk is a retiree living in Stevens Point, Wiscon-
sin. He incurred significant debts providing for his wife’s
medical care before her death in 2007, and he himself suffered
a stroke in early 2009. With his medical debts mounting—they
exceeded $345,000 by the time he filed for bankruptcy—Bronk
sought the advice of an attorney about pre-bankruptcy
exemption planning. His assets included his home, which he
owned free and clear, and a certificate of deposit in the amount
of $42,000. On the advice of counsel, Bronk sought to protect
these nonexempt assets by converting them to exempt assets.
4                                             Nos. 13-1123 & 13-1516

    In May 2009, a few months before filing his Chapter 7
petition, Bronk borrowed $95,000 from Citizens Bank and
mortgaged his previously unencumbered home. He used these
funds to establish five college savings accounts for the benefit
of his grandchildren under section 529 of the Internal Revenue
Code. That section enables states to create “qualified tuition
program[s]” in the form of prepaid tuition plans and college
savings accounts that enjoy favorable federal tax treatment.
I.R.C. § 529(b). Wisconsin has enacted legislation creating both.
See WIS. STAT. § 16.641 (college savings accounts); id. § 16.64
(prepaid tuition plans).1
    Account owners control the funds in these accounts (known
as “Edvest” accounts) and may designate and change account
beneficiaries. § 16.641(1), (3); see also EDVEST, PLAN DISCLOSURE
BOOKLET AND PARTICIPATION AGREEMENT I-2 (Oct. 29, 2012),
available at https://www.edvest.com/documents/wi_
disclosure.pdf (“[The account owner] may cancel th[e] [Edvest
Participation] Agreement at any time by requesting a 100%
distribution from [his or her] Account.”). Beneficiaries do not
control account assets. See WIS. ADMIN. CODE ADMIN. § 81.11(3)
(“A designated beneficiary may not authorize distribution or
withdrawal of account funds.”); see also Susan T. Bart, The Best
of Both Worlds: Using a Trust to Make Your 529 Savings Accounts
Rock, 34 ACTEC J. 106, 111 n.31 (2008) (“[U]nless the
beneficiary is the account owner, the beneficiary has only a


1
 These statutes were renumbered during the pendency of this case. See
2011 Wis. Act 32 §§ 75–76. Section 16.641 (college savings accounts) was
previously codified at section 14.64. Section 16.64 (prepaid tuition plans)
was codified at section 14.63. We use the current statutory designations.
Nos. 13-1123 & 13-1516                                          5

mere expectancy, and does not have any property interest to
transfer.”).
    In addition to creating the college savings accounts using
the equity in his home, Bronk converted the $42,000 certificate
of deposit into an annuity with CM Life Insurance Company.
The annuity contract was issued on May 4, 2009, and does not
begin making payments until January 3, 2035, but it also
includes a death benefit.
    On August 5, 2009, Bronk filed for bankruptcy under
Chapter 7. The trustee objected to the college-fund and annuity
transactions, arguing that Bronk had transferred his property
with the intent to hinder, delay, or defraud his creditors and
thus should be denied a discharge. See 11 U.S.C. § 727(a)(2)(A).
The trustee also lodged individual objections to the exemptions
Bronk claimed for these converted assets. See WIS. STAT.
§ 815.18(10). To be more specific, Bronk sought an exemption
for the college savings accounts under section 815.18(3)(p),
which allows debtors to shield from creditors “[a]n interest in
a college savings account.” He also sought an exemption for
the annuity under section 815.18(j), which shields certain
qualifying retirement benefits from creditors. The parties
submitted the case on stipulated facts.
   The bankruptcy judge first addressed the trustee’s argu-
ment for denial of discharge and rejected it, finding that there
was no evidence that Bronk had acted with intent to hinder,
delay, or defraud creditors. See In re Bronk, 444 B.R. 902, 908–17
(Bankr. W.D. Wis. 2011). Turning to the claimed exemptions,
the bankruptcy judge interpreted section 815.18(3)(p)—the
exemption for college savings accounts—as applying only to
6                                       Nos. 13-1123 & 13-1516

the beneficiary’s interest, not the account owner’s interest, and
on that understanding disallowed the claimed exemption for
the Edvest accounts Bronk had established for his grandchil-
dren. Id. at 918–24. But the judge accepted Bronk’s argument
about the annuity, holding that it was fully exempt as a
retirement benefit under section 815.18(3)(j) rather than only
partially exempt under section 815.18(3)(f)3, as the trustee had
argued. See id. at 925–26.
    Both sides appealed to the district court. The district judge
vacated the bankruptcy court’s decision while agreeing with
most of its reasoning. First, the district judge agreed that Bronk
was entitled to a discharge because the trustee had not proven
that the asset transfers were made with intent to hinder, delay,
or defraud creditors. That decision is not challenged on appeal,
so we say no more about it here. Second, the district judge
agreed with the bankruptcy judge’s interpretation of
section 815.18(3)(p) and upheld the decision to deny the
claimed exemption for Bronk’s Edvest accounts. Finally, the
judge narrowed the bankruptcy court’s interpretation of
“retirement benefit” under section 815.18(3)(j) and remanded
the case for additional fact-finding on whether the annuity
qualified under the narrower understanding of the statute.
    On remand the bankruptcy judge again held that the
annuity was fully exempt as a retirement benefit under
section 815.18(3)(j). A new judgment was entered, and Bronk
again appealed to the district court to preserve issues previ-
ously decided for further review in this court. The parties
appeared in the district court and advised the judge that no
further proceedings were necessary. The district court then
Nos. 13-1123 & 13-1516                                                      7

issued a summary order denying the appeal while “preserving
to the full extent possible the parties’ previous challenges
before the bankruptcy court and this court.”2
   Bronk appealed, challenging the disallowance of the
exemption for his college savings accounts under
section 815.18(3)(p). The trustee filed a cross-appeal challeng-
ing the court’s ruling on the annuity.


                             II. Discussion
    The Bankruptcy Code allows debtors to exempt certain
property from the bankruptcy estate under either federal law
or the law of their state of residence. See 11 U.S.C. § 522(b); In
re Geise, 992 F.2d 651, 653 n.4, 655–56 (7th Cir. 1993). As a
Wisconsin resident, Bronk sought two exemptions available
under state law, one for the college savings accounts under
section 815.18(3)(p) and another for the annuity under
section 815.18(3)(j).


2
  Bronk argues that we lack jurisdiction over the trustee’s cross-appeal
because he did not file a separate appeal in the district court from the
bankruptcy court’s ruling on remand. We disagree. Both sides have
appealed from a judgment of the district court explicitly preserving all
issues raised and decided in the case. We have jurisdiction over the final
judgment of the district court, and “[t]he general rule is that an appeal from
a final judgment allows the appellant to challenge any interlocutory actions
by the district court along the way toward that final judgment.” Luevano v.
Wal-Mart Stores, Inc., 722 F.3d 1014, 1019 (7th Cir. 2013). The issues before
us now were presented to and decided by the district court in its initial
opinion, which became final and appealable upon entry of the final
judgment after the case returned following remand to the bankruptcy court.
8                                       Nos. 13-1123 & 13-1516

  We begin with the text of Wisconsin’s exemption statute,
which provides in relevant part:
         (3) EXEMPT PROPERTY. The debtor’s interest in
      or right to receive the following property is
      exempt … :
          …
         (f) Life insurance and annuities. …
         2. Except as provided in subd. 3. and par. (j),
      any unmatured life insurance or annuity contract
      owned by the debtor and insuring the debtor …
       and the debtor’s aggregate interest, not to
      exceed $150,000 in value … .
         3. a. If the life insurance or annuity contract
      was issued less than 24 months before the appli-
      cable date, the exemption under this paragraph
      may not exceed $4,000.
          …
          (j) Retirement benefits. 1. Assets held or
      amounts payable under any retirement, pension,
      disability, death benefit, stock bonus, profit
      sharing plan, annuity, individual retirement
      account, individual retirement annuity, Keogh,
      401–K or similar plan or contract providing
      benefits by reason of age, illness, disability, death
      or length of service and payments made to the
      debtor therefrom.
Nos. 13-1123 & 13-1516                                          9

           2. The plan or contract must meet one of the
       following requirements:
          a. The plan or contract complies with the
       provisions of the internal revenue code.
           b. The employer created the plan or contract
       for the exclusive benefit … of some or all of the
       employees, or their dependants or benefi-
       ciaries … .
           …
           (p) College savings accounts. An interest in a
       college savings account under s. 16.641.
§ 815.18(3).
    The statute contains its own rule of construction: “This
section shall be construed to secure its full benefit to debtors
and to advance the humane purpose of preserving to debtors
and their dependents the means of obtaining a livelihood, the
enjoyment of property necessary to sustain life and the
opportunity to avoid becoming public charges.” WIS. STAT.
§ 815.18(1). Because this case presents questions of statutory
interpretation, our review is de novo. Pickett v. Sheridan Health
Care Ctr., 610 F.3d 434, 440 (7th Cir. 2010).


A. The College Savings Accounts
    Wisconsin’s exemption statute allows debtors to exempt
“[a]n interest in a college savings account under s. 16.641” from
execution by creditors. § 815.18(3)(p). The term “interest” is not
10                                             Nos. 13-1123 & 13-1516

specifically defined in the statute or by regulation,3 but an
“interest” is generally defined as “[a] legal share in something;
all or part of a legal or equitable claim to or a right in prop-
erty.” BLACK’S LAW DICTIONARY 934 (10th ed. 2014). Bronk
clearly has a legal interest in each of the Edvest college savings
accounts. He owned the accounts and could at any time select
and change beneficiaries, transfer funds between accounts,
receive distributions from the accounts, and (subject to certain
limitations) remove funds from the accounts. See
§ 16.641(3)(a)–(b). Indeed, if Bronk lacked a legal or equitable
interest in the accounts, they would not have been part of the
bankruptcy estate in the first place. See 11 U.S.C. § 541(a)(1)
(including in the property of the estate “all legal or equitable
interests of the debtor in property”).
    The trustee insists nonetheless that the statute is ambiguous
and must be understood as simply incorporating by reference
the exemption contained in section 16.641, the enabling statute
for Wisconsin’s Edvest program. Section 16.641 contains an
exemption to protect the beneficiary’s interests in a college
savings account: “A beneficiary’s right to qualified withdraw-
als under this section is not subject to garnishment, attachment,
execution, or other process of law.” § 16.641(7).
    Both lower courts agreed with the trustee that
section 815.18(3)(p) is ambiguous and thus embarked on an
elaborate examination of legislative history and similar
legislation in other states to determine the relationship between


3
 See WIS. STAT. § 815.18(2) (defining certain terms in the statute); see also
WIS. ADMIN. CODE ADMIN. § 81.02.
Nos. 13-1123 & 13-1516                                          11

the two exemptions. This foray into matters extrinsic to the
statute led both judges to conclude that the general exemption
in section 815.18(3)(p) covers only the beneficiary’s interest in a
college savings account, not the account owner’s interest.
    Venturing into legislative history was unnecessary, as was
the search for guidance from other states. The presence of a
beneficiary-specific exemption in section 16.641—the enabling
statute for Wisconsin’s college-savings program—does not
mean that the general exemption in section 815.18(3)(p) is
ambiguous. The general exemption statute is succinct and
straightforward: A debtor may exempt “an interest in a college
savings account under s. 16.641” from execution by creditors.
The lower courts read this text as if it said that a debtor may
exempt “[a]n interest in a college savings account that is exempt
under s. 16.641.” That reading adds language that is not there,
making section 815.18(3)(p) superfluous—a mere duplication
of the beneficiary-specific exemption in section 16.641(7).
    The test for statutory ambiguity in Wisconsin looks
to “whether the statutory … language reasonably gives rise to
different meanings.” State ex rel. Kalal v. Circuit Court for Dane
Cnty., 681 N.W.2d 110, 124 (Wis. 2004) (internal quotation
marks omitted). And “[s]tatutory language is read where
possible to give reasonable effect to every word, in order to
avoid surplusage.” Id. The trustee finds ambiguity in
section 815.18(3)(p) only by adding language and turning it
into mere surplusage. That’s not a reasonable interpretation of
the statute.
   The general exemption for college savings accounts in
section 815.18(3)(p) would have no work to do if it is limited to
12                                      Nos. 13-1123 & 13-1516

the beneficiary’s interest in the account, which is separately
protected by section 16.641(7). Indeed, the trustee’s interpreta-
tion of section 815.18(3)(p) actually undermines the interests of
college-fund beneficiaries, making section 16.641(7) ineffective.
If account owners may not invoke the general exemption in
section 815.18(3)(p), as the trustee suggests and the lower
courts held, then a college savings plan can be reached by an
account owner’s creditors, impairing the beneficiary’s right to
qualified withdrawals.
    The plain-meaning interpretation of section 815.18(3)(p) is
the only reasonable one. It’s the only reading of the statute that
gives reasonable effect to both exemptions. The general
exemption in section 815.18(3)(p) complements the more
specific exemption in section 16.641(7), completing the protec-
tion for college savings accounts. Accordingly, we hold that
section 815.18(3)(p) applies to an account owner’s interest in a
section 16.641 college savings account. Bronk was entitled
under that section to exempt his interest in the Edvest accounts
from the bankruptcy estate.


B. The Annuity
   The extent to which Bronk’s annuity is exempt depends on
how it is classified. The exemption statute defines “annuity”
generally as “a series of payments payable during the life of
the annuitant or during a specific period.” WIS. STAT.
§ 815.18(2)(am). Two subsections in section 815.18 apply to
annuities, though one is more limited than the other.
Nos. 13-1123 & 13-1516                                             13

   An annuity may be fully exempt as a “retirement benefit”
under section 815.18(3)(j), which covers the following assets:
       Assets held or amounts payable under any
       retirement, pension, disability, death benefit,
       stock bonus, profit sharing plan, annuity, indi-
       vidual retirement account, individual retirement
       annuity, Keogh, 401–K or similar plan or contract
       providing benefits by reason of age, illness,
       disability, death or length of service and pay-
       ments made to the debtor therefrom.
§ 815.18(3)(j)1. To qualify for full exemption under this subsec-
tion, the retirement plan or contract must meet one of two
additional requirements: (1) it must be employer sponsored; or
(2) it must comply with the Internal Revenue Code.
§ 815.18(3)(j)2.
   A more general exemption applies to “life insurance and
annuities,” but only up to $150,000 in value.4 § 815.18(3)(f)2.
And if the annuity contract was issued less than 24 months
prior to the date the exemption is claimed, the exemption is
limited to $4,000. See § 815.18(3)(f)3.a.
    Two criteria differentiate annuities covered under subsec-
tion (3)(j) from those under subsection (3)(f). The first is how
benefits are paid. Subsection (3)(f) applies to “any
unmatured … annuity,” but the exemption for retirement
benefits only covers annuities “providing benefits by reason of



4
  This subsection of the exemption statute initially covered only life
insurance, but annuities were added in 2003. See 2003 Wis. Act 304.
14                                         Nos. 13-1123 & 13-1516

age, illness, disability, death or length of service,”
§ 815.18(3)(j)1. So to qualify for full exemption as a retirement
benefit under subsection (3)(j), an annuity must distribute
benefits because of or conditioned on age, illness, disability, death,
or length of service.
    The term “by reason of” is synonymous with “because of”
or “on account of.” WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY 194 (1961) (defining “because of” as “by reason of :
on account of”). It requires a causal connection between the
phrase preceding it—“providing benefits”—and the list of
factors that comes after it. Cf. Rousey v. Jacoway, 544 U.S. 320,
326–27 (2005) (“We have interpreted the phrase ‘on account of’
elsewhere within the Bankruptcy Code to mean ‘because of,’
thereby requiring a causal connection between the term that
the phrase ‘on account of’ modifies and the factor specified in
the statute at issue.”). Accordingly, for any of the listed
retirement products, the statute requires that one of the listed
conditions triggers payment of benefits.
    The bankruptcy judge took a more expansive view of
section 815.18(3)(j), relying on reasoning from In re Bogue,
240 B.R. 742, 749 (Bankr. E.D. Wis. 1999), in which another
bankruptcy judge in Wisconsin read the statute to include any
retirement product that was purchased by reason of age, death,
etc. The trustee, on the other hand, argues for an interpretation
that narrows the reach of the retirement-benefits exemption, at
least where annuities are concerned. He proposes that to
qualify for exemption as a “retirement benefit” under
section 815.18(3)(j), an annuity must “provide[] income as a
substitute for wages upon the withdrawal from occupation or
Nos. 13-1123 & 13-1516                                            15

active working life” rather than “operat[ing] merely as a
savings account.”
    Both interpretations stray from the statutory text. By its
terms, the statute requires that the retirement product
“provid[e] benefits” by reason of age, illness, death, etc., not that
it be “purchased” by reason of age. Moreover, there is no special
test for annuities.
    Bronk’s annuity begins paying on a fixed date—January 3,
2035—and thus does not pay benefits because of age, length of
service, or the onset of an illness or disability. But the annuity
also contains a death benefit. That feature brings it under the
umbrella of section 815.18(3)(j).
    There is a second requirement, however. To qualify for full
exemption as a “retirement benefit,” a retirement product must
be either employer sponsored or “compl[y] with the provisions
of the internal revenue code.” § 815.18(3)(j)2.a. Bronk’s annuity
is not employer sponsored, so it must comply with the Internal
Revenue Code to be exempt under section 815.18(3)(j). What it
means to comply with the Internal Revenue Code is an
important legal question not clearly answered by the text of the
statute.
   One possible meaning is that the retirement product must
comply with Internal Revenue Code §§ 401–409, which govern
tax treatment of certain retirement plans. But Wisconsin
bankruptcy courts have uniformly interpreted the exemption
as simply requiring that an annuity be tax deferred under
16                                               Nos. 13-1123 & 13-1516

Internal Revenue Code § 72.5 This approach originated prior to
the addition of annuities to the life-insurance exemption in
section 815.18(3)(f) in 2003, and we question whether it
survives the change in the law. Many annuities that have
nothing to do with retirement in fact provide benefits by
reason of age or death, and if the requirement that an annuity
comply with the Internal Revenue Code means only that it be
tax deferred, a large swath of nonretirement annuities may fall
under section 815.18(3)(j), making the annuity exemption
under section 815.18(3)(f) largely redundant.
    Despite these reservations, we do not reach the question
whether Bronk’s annuity “complies with” the Internal Revenue
Code as required by section 815.18(3)(j)2.a. The trustee raised
this issue for the first time in the district court, and even then
simply asserted—without developing an argument—that
Bronk’s annuity was not tax qualified. The district judge



5
  See, e.g., In re Woller, 483 B.R. 886, 900–01 (Bankr. W.D. Wis. 2012) (“The
Wisconsin legislature did not expressly mandate compliance with the
requirements of §§ 401–409 of the IRC (which cover pension, profit-sharing,
stock bonus, and other retirement plans), and the Court will not write such
a requirement into the exemption statute.”); In re Vangen, 334 B.R. 241, 244
(Bankr. W.D. Wis. 2005) (“All that is required for an annuity to be exempt
under this section is that it qualify for tax-deferred status under the Federal
Internal Revenue Code.”); In re Bogue, 240 B.R. 742, 746 (Bankr. E.D. Wis.
1999) (“The Wisconsin retirement benefits exemption statute does not limit
its application to ‘traditional’ retirement plans, ‘qualified’ annuities, or
annuities which comply with IRC §§ 401–409.”); In re Bruski, 226 B.R. 422,
424 (Bankr. W.D. Wis. 1998) (“It is not whether the annuity is taxable in
accordance with the code, but whether the tax is deferred in accordance
with the code. If so, the annuity qualifies for the exemption.”).
Nos. 13-1123 & 13-1516                                        17

considered the argument waived and we agree. See Judge v.
Quinn, 612 F.3d 537, 557 (7th Cir. 2010).
    Accordingly, for the foregoing reasons, we REVERSE the
judgment of the district court to the extent that it affirmed the
disallowance of the exemption for the college savings plans. In
all other respects, the judgment is AFFIRMED.
