MEMORANDUM OPINION

STEPHEN MITCHELL, Bankruptcy Judge

This matter is before the court on the chapter 7 trustee's objection to the debtors' claimed exemptions. An evidentiary hearing was held on December 17, 1996, and the matter was then continued to January 27, 1997, for further evidence and oral argument. At the conclusion of the January 27, 1997, hearing, the court took the matter under advisement. For the reasons set forth in this opinion, the trustee's objections will be sustained in part and overruled in part.

Facts

The debtors, who are husband and wife, filed a joint petition for relief under chapter 7 of the Bankruptcy Code in this court on August 22, 1996. Mr. Asghar owns, as a sole proprietorship, a moving company, Ace Moving and Rentals. This business employs his wife as well; however, she is not an owner of it. On October 29, 1996 (the fourth day after the meeting of creditors), the debtors recorded homestead deeds exempting certain property. On Mr. Asghar's homestead deed, he exempted $6,000 of the cash value of a life insurance policy. Ms. Asghar claimed exempt on her homestead deed $550 in a business checking account with "Central Fidelity," $200 in a personal checking account with "Central Fidelity," $750 in a past due receivable, $1,500 in a current receivable, $300 in a First Union checking account, $500 in a certificate of deposit at Central Fidelity, and $1,200 in the cash value of her husband's life insurance policy that he had partially exempted. Additionally, the debtors claimed exempt on their schedules six motor vehicles as "tools of the trade" under the Virginia "poor debtor's" exemption. The trustee timely filed his objection to the debtors' claimed exemptions on November 25, 1996. The trustee raised numerous objections; however, several of these were resolved between the parties and by the filing of amended schedules for personal property and exemptions on December 17, 1996. Accordingly, the court will discuss only those exemptions that the trustee still objects to.

The exemptions in dispute are Ms. Asghar's exemption on her homestead deed of $1,200 of the cash value of a life insurance policy owned by Mr. Asghar, her homestead exemption of the $1,500 current receivable for the business, her homestead exemption of a $500 certificate of deposit, and the joint exemption, as "tools of the trade," of motor vehicles used in Mr. Asghar'S moving business. As different legal analysis is required to resolve the various objections, the court will address each in turn, and other relevant facts will be discussed in connection with the issues to which they relate.

Conclusions of Law and Discussion A.

This court has jurisdiction of this matter under 28 U.S.C. § 1334 and 157(a) and the general order of reference entered by the United States District Court for the Eastern District of Virginia on August 15, 1984. This is a core proceeding under 28 U.S.C. § 157(b)(2)(B).

Under § 541, Bankruptcy Code, the filing of a bankruptcy petition creates an "estate" composed of all legal and equitable interests of the debtor in property. Under § 522(b), Bankruptcy Code, however, an individual debtor may "exempt from property of the estate" § and thus retain, free from the claims of creditors — either the property specified in § 522(d), Bankruptcy Code ("the Federal exemptions"), or, alternatively, the exemptions allowable under state law and general (nonbankruptcy) Federal law. A state, however, may by statute "opt out" of allowing its residents to take advantage of the Federal exemptions. § 522(b)(1), Bankruptcy Code. Virginia has done precisely that. VA. CODE ANN. § 34-3.1. Accordingly, residents of Virginia filing bankruptcy petitions may claim only those exemptions allowable under state law and general Federal law. In re Smith, 45 B.R. 100 (Bankr. E.D. Va. 1984).

A debtor is required to file a list of the property he or she claims exempt. Unless a party in interest objects, "the property claimed as exempt on such list is exempt." § 522( I), Bankruptcy Code. The trustee or any creditor may file an objection within 30 days after the conclusion of the meeting of creditors or within 30 days after the filing of "any amendment to the list or supplemental schedules." F.R.Bankr.P. 4003(b). If an objection is filed, the objecting party has the burden of proof. F.R.Bankr.P. 4003(c).

The state law exemptions available to Virginia residents are primarily set forth in Title 34, VA. CODE ANN. The most important of these are the "homestead" exemption in VA. CODE ANN. § 34-4 and the "poor debtor's" exemption in VA. CODE ANN. § 34-26. Under the homestead exemption, a "householder" — defined as any resident of Virginia — may hold up to $5,000 of real or personal property exempt from creditor process by filing for record an instrument known as a homestead deed in the Circuit Court of the city or county where the real property is located and, if personal property is claimed, where the debtor resides. VA. CODE ANN. § 34-4, 34-6, 34-13, and 34-14. An additional $500 exemption is allowed for each dependent supported by the householder. VA. CODE ANN. § 34-4. A disabled veteran is entitled to a further $2,000 exemption. VA. CODE ANN. § 34-4.1. In the case of a debtor who files for bankruptcy, the homestead deed must be filed on or before the fifth day after the date initially set for the meeting of creditors. VA. CODE ANN. § 34-17.

Under the poor debtor's exemption, a householder may hold exempt from creditor process certain listed assets and categories of assets, some with dollar limits, some without. Va. Code § 34-26. No specific act, such as the recording of a homestead deed, is required to perfect the poor debtor's exemption. Among the types of property a debtor may exempt under this section are "tools of the trade," or equipment the debtor uses in his or her occupation. Id.

B.

The court first addresses the debtors' claimed exemptions of the cash value of the life insurance policy.

It is undisputed that Mr. Asghar is the owner of the life insurance policy. Thus, the trustee does not object to Mr. Asghar's exempting $6,000 of the cash value of the life insurance policy with his homestead exemption. What the trustee does object to is Ms. Asghar's exempting the remaining $1,200 of the cash value of the policy on her homestead deed because she is not the "owner" of the policy. Ms. Asghar argues that she should be entitled to exempt at least this amount, notwithstanding that she is not the owner, because, under Virginia law, she would have an "equitable interest" in the cash value of the property in the event of a divorce, VA. CODE ANN. § 20-107.3, and because the total exemptions claimed do not exceed, in the aggregate, what the debtors could claim individually.

Preliminarily, the court notes that when a husband and wife file a joint petition, they have separate, legal estates in bankruptcy. Under § 302(a), Bankruptcy Code, a husband and wife may file a joint case when seeking relief under the Bankruptcy Code. A bankruptcy court may order the estates of a husband and wife to be jointly administered whether a joint petition was filed, or whether separate petitions are filed. F.R.Bankr.P. § 1015(b). In this District, joint administration is the rule when a joint petition is filed unless the trustee or other interested party files a timely objection. Local Rule 1015-1. However, joint administration does not by itself effect a substantive consolidation, and absent such consolidation, the husband and wife each have separate and distinct estates, and each may claim only his or her own exemptions. See § 302(b), Bankruptcy Code; F.R.Bankr.P. § 1015(a); In re Arnold, 33 B.R. 765, 767 (Bankr. E.D.N.Y. 1983). This point cannot be overemphasized § both the Bankruptcy Code and the Bankruptcy Rules contemplate that husband-and-wife debtors in a joint case will have their own individual exemptions at their disposal. § 522(m), Bankruptcy Code; Cheeseman v. Nachman ( In re Cheesemari), 656 F.2d 60, 64 (4th Cir. 1981); see also Butler v. Sharik ( In re Sharik), 41 B.R. 388, 390 (Bankr. E.D.N.C. 1984). Consequently, the debtors' contention in the present case that they have claimed no more than the "aggregate" of their individual homestead exemptions is misplaced. See In re Heath, 101 B.R. 469, 470-71 (W.D. Va. 1987) (Anderson, J.).

This court next turns to whether a potential interest under a hypothetical equitable distribution scenario is sufficient to support a claim of exemption. This question has been previously addressed in In re Wilkinson, 100 B.R. 315 (Bankr. W.D. Va. 1989). In Wilkinson, the debtors filed a joint petition, and the wife attempted to exempt property which her husband owned individually. Id. at 315. The wife based her exemption on the fact that because they treated all of their property as jointly owned, she therefore possessed an "equitable interest" under an equitable distribution of marital property. Id. at 315-16. In essence, the debtors attempted to extend rights available under equitable distribution law to exemptions in bankruptcy. Id. at 316. The court rejected the debtors' argument and held that under Virginia's equitable distribution statute, VA. CODE ANN. § 20-107.3, spouses have rights and interests in marital property for purposes of that section only. Id. at 316-17. Moreover, the court reasoned that the statute only authorizes a court to order the division or transfer of jointly owned property, not property that is individually owned, subject to exceptions not applicable here. Id. at 317. Consequently, the court held that the wife was not entitled to exempt property in which she did not own, and could not "boot-strap" VA. CODE ANN. § 20-107.3 to do so as the statute clearly provided otherwise. Id.; see also In re Cathcart, — B.R. —, 1996 WL 729283 (Bankr. E.D. Va. 1996) (holding that a wife may not claim an exemption on her homestead deed of a mere expectancy as a revocable beneficiary of her husband's individual retirement account); In re Hohenberg, 174 B.R. 487, 493 (Bankr. W.D. Tenn. 1994) (reasoning that a spouse has no vested interest in marital property until there is an equitable distribution award and that marital property has no meaning other than in divorce proceedings).

In the present case, the court is confronted with the same argument — Ms. Asghar is attempting to exempt property which she does not own on the basis that she possessed an "equitable interest" under an equitable distribution of marital property. This court agrees with the reasoning of Wilkinson and concludes that in order to exempt property, not only must the property be part of the bankruptcy estate under § 541, the debtor claiming the exemption must own the property, or have an interest in the property. A mere expectancy of an equitable interest in a divorce is not enough to support an exemption in bankruptcy. Here, Ms. Asghar's potential interest in the cash value of the insurance, based on its probable classification as "marital property" in the event of a divorce, is simply too remote and speculative to support a claim of exemption in bankruptcy. Even if the cash value of the life insurance policy were considered "marital property," there is no way to assign a value to Ms. Asghar's interest since a divorce court in Virginia may consider a multitude of factors in determining a "fair and equitable monetary reward." VA. CODE ANN. § 20-107.3(E). Accordingly, this court will sustain the trustee's objection to Ms. Asghar's exemption on her homestead deed of $1,200 of the cash value of Mr. Asghar's life insurance policy.

C.

The trustee next objects to Ms. Asghar's exemption of a $1,500 receivable for the business. The trustee bases his objection in part on the fact that the homestead deed listed the $1,500 as a "current receivable" while on the amended schedule of property claimed exempt (Schedule C), the debtor described the amount as "payment received." The trustee asserts that there is a clear distinction between a "receivable" and actual "cash," and that a homestead deed exempting an amount under one term is ineffective if that amount is described using a different term on the debtor's schedules. The debtors assert that the same property is sought to be exempted, and explain that the "receivable" became "cash" upon payment (post-petition) by the customer.

The court does not find the discrepancy in terminology fatal to the claim of exemption, and would not disallow the exemption solely on that ground. However, the court is constrained to conclude that Ms. Asghar cannot exempt the receivable for the same reason that she cannot exempt the cash value of the life insurance policy, namely because she did not have an ownership interest in the receivable on the filing date. Consistently throughout the schedules, the debtors listed the business, Ace Movers and Rentals, as being a sole proprietorship owned by Mr. Asghar. Ms. Asghar was a salaried employee of the company, but had no direct interest in its income or revenues. Accordingly, the court will sustain the trustee's objection to Ms. Asghar's exemption on her homestead deed of the $1,500 "current receivable" on the basis that she had no interest to exempt.

D.

The court now turns to the $500 certificate of deposit exempted by Ms. Asghar on her homestead deed.

It is undisputed that this certificate of deposit is jointly owned by the debtors. Mr. Asghar — because he had exhausted his homestead exemption — did not exempt any interest in the certificate of deposit. Instead, Ms. Asghar exempted the entire amount on her homestead deed. The trustee objects to the exemption to the extent it exceeds what he concedes to be her one-half interest, i.e. $250.

Under Virginia law, ownership of the proceeds in bank accounts is specifically provided for by statute. VA. CODE ANN. § 6.01-125.3(A) provides that "[a] joint account belongs, during the lifetimes of all parties, to the parties in proportion to the net contributions by each to the sums on deposit, except that a joint account between persons married to each other shall belong to them equally, and unless, in either case, there is clear and convincing evidence of a different intent." (emphasis added). Included within the definition of "account" is a certificate of deposit. VA. CODE ANN. § 6.01-125.1(1). Here, it is undisputed that the debtors jointly owned the certificate. As no evidence has been presented to suggest that a different intent of ownership was intended, the statutory presumption controls. The statute presumes that the debtors here each owned $250 in the certificate of deposit. Since, as discussed above, in order to exempt property one must own it, the trustee's objection to Ms. Asghar's exemption of the $500 certificate of deposit will be sustained to the extent she exempted more than her proportionate share of ownership.

E.

There remains, finally, the claimed exemptions for the motor vehicles as tools of the debtor's trade under VA. CODE ANN. § 34-26(7). The cited subsection, which is part of the poor debtor's exemption, exempts the following category of assets:

Tools, books instruments, implements, equipment, and machines, including motor vehicles, vessels, and aircraft, which are necessary for use in the course of the householder's occupation or trade not exceeding $10,000 in value, except that a perfected security interest on such personal property shall have priority over the claim of exemption under this section. A motor vehicle, vessel or aircraft used to commute to and from a place of occupation or trade and not otherwise necessary for use in the course of such occupation or trade shall not be exempt under this subsection. "Occupation," as used in this subdivision, includes enrollment in any public or private elementary, secondary, or vocational school or institution of higher education.

(emphasis added). It is clear on the face of the statute that a motor vehicle may constitute a tool of the trade. Accordingly, the question before the court is whether the motor vehicles are "necessary for use" in the course of Mr. Asghar's moving business.

At the outset, it is well-settled in Virginia that exemptions are to be liberally construed in favor of the debtor. Tignor v. Parkinson (In re Tignor), 729 F.2d 977, 981 (4th Cir. 1984). Prior to the 1990 amendments to § 34-26, Code of Virginia, a number of courts had ruled that debtors could not exempt motor vehicles as tools of the trade under the statute as it then read. See In re Dummitt, 2 B.R. 136 (Bankr. W.D. Va. 1980) (traveling salesman's automobile not tool of the trade); Associates Financial Services Co. v. Williams, 39 B.R. 944 (Bankr. W.D. Va. 1984) (salesman's automobile not tool of the trade even though used by debtor to pursue livelihood); In re Alien, 52 B.R. 206 (Bankr. E.D. Va. 1985) (jeep and van not tools of a carpenter's trade). The 1990 amendments broadened the scope of the exemption for tools of the trade, first, by eliminating the restriction that only a "mechanic" could claim it, and second, by specifically recognizing that a motor vehicle could constitute a tool of the trade. Even as amended, however, the statute still requires that a particular tool, implement, or machine be "necessary." See In re Quidley, 39 B.R. 362, 367 (Bankr. E.D. Va. 1984) (Shelley, J), where the court held that the test was "whether "the item claimed to be exempt [is] reasonably necessary both in kind and in quality for the workman to perform his chosen craft in an efficient and competent manner'" and that "the purpose of the exemption statute is "to set forth and protect the basic tools and utensils in order to aid the debtor in continuing in his means of livelihood' and not to `[guarantee] to the mechanic each and every possible and potential tool that can be used to set up the perfect workshop.'" See, In re Weinstein, 192 B.R. 133 (Bankr. E.D. Va. 1995) (truck not "necessary" to debtor's occupation as air conditioning mechanic — and therefore not exempt as a tool of the trade — on the date the bankruptcy petition was filed, even though it later became necessary when the debtor became self-employed). The Fourth Circuit, in an opinion predating the 1990 amendment to § 34-26, observed,

Although no test has emerged, the standard applied by the courts appears to be whether the items are "specially suited" to business use or peculiar to the trade of the debtor.

Dominion Bank v. Nuckolls, 780 F.2d 405, 413 (4th Cir. 1985) (internal citations omitted). Most recently, the United States District Court for this district held that § 34-26(7) "exempts only those tools which the debtor absolutely requires in order to efficiently and competently perform the functions of his occupation or trade." Monticello Arcade L.P. v. Lyall (In re Lyall), 191 B.R. 78, 82-83 (E.D. Va. 1996), op. on remand, 193 B.R. 767 (Bankr. E.D. Va. 1996) (automobile was "necessary" for debtor's occupation as architect).

Mr. Asghar testified that all of the vehicles "are necessary to the business" and that all of the vehicles except the 1983 Toyota Tercel are used exclusively in the business. He also testified that when no other vehicle was available, he would occasionally drive the 1983 Toyota Tercel home. The reason given, which is uncontroverted, for why he has numerous vehicles is that he selects a vehicle that is appropriate for the size of the job and also that smaller vehicles are used to transport employees between job sites. He also testified, however, that his business survived for over three years — to sometime in 1994 — with just two vehicles. The trustee points to this testimony to suggest that no more than one or two vehicles can be fairly characterized as "necessary" to the debtor's trade. The trustee argues that since Mr. Asghar candidly admitted that he got by for more than three years with only two vehicles, the additional vehicles he subsequently acquired, although possibly useful, cannot be essential. In fact, the trustee asserts that, except for the 1990 Hino F017 truck, no other vehicle is absolutely necessary to the business.

The court disagrees with the trustee's cramped interpretation of the statute and of the testimony. Essentially, the trustee focuses only on the requirement that the trucks be "absolutely" necessary while ignoring the remaining element of the test, which requires that necessity be measured in terms of the debtor's ability "to efficiently and competently" carry on his business. Lyall, supra. Put another way, a debtor who has built his business and its revenues up over time is not required to revert to start-up status and accept a reduced income just because he managed to survive that way while starting out. Of course, the $10,000 statutory limitation on what may be exempted as tools of the trade may dictate surrender of some items that a debtor needs to carry on his occupation or trade in an efficient and competent manner, but so long as that limitation is not exceeded, the debtor is not barred from exempting equipment needed in the business simply because the business could be carried on, albeit less efficiently, without that particular item. The court does find that the 1982 GMC, which the debtor asserts is worth $2,500, is not "necessary" to the business. Mr. Asghar testified that the GMC was not "Completely functional" and that it could only be used in the summer. This testimony stands uncontroverted, and there was no evidence that Mr. Asghar's business suffered during the time this vehicle was not used. The court, therefore, cannot find that the 1982 GMC is "necessary" to perform his business in an "efficient and competent manner." Accordingly, the trustee's objection to the exemption of the 1982 GMC is sustained.

Based on the unrebutted testimony of Mr. Asghar, however, the court concludes that the remaining five vehicles are "necessary" to the efficient and competent operation of his moving business. He testified that these vehicles are either used to actually move items, or to transport employees to job sites. The trustee's argument that only one, perhaps two, vehicles are "absolutely" necessary is not persuasive. Here, the vehicles are not merely collateral or peripheral to the debtor's business, the vehicles are the business. Unlike in Alien where the court held that certain vehicles were not "tools of the trade" of a carpenter, the debtor here owns a moving company. An essential "tool" of that trade are vehicles to actually conduct the move. Moreover, this result is entirely consistent with the Quidley, Dominion Bank and Lyall cases discussed above. These vehicles are "necessary" for the debtor to carry on his business "in an efficient and competent manner" and are "Specially suited to the peculiar trade of the debtor."

As scheduled, however, the total value of Mr. Asghar's interest in the five vehicles that the court does find to be necessary for use in his business comes to $10,201. As the statute only permits a debtor to exempt property under this section up to a value of $10,000, the debtors here have exceeded the maximum amount that may be exempted. Accordingly, the trustee's blanket objection to the exemption of the five motor vehicles after other than the 1982 GMC truck is overruled, but the exemption is disallowed to the extent that the value of the vehicle exceeds $10,000.

A separate order will be entered consistent with this opinion.

The debtors used an obsolete form of homestead deed that does not conform to the form prescribed in VA. CODE ANN. § 34-14. The statutory form, in particular, requires the householder to state whether he or she is claiming the additional exemption allowed for dependents and disabled veterans, and, if the former, their names and ages. The homestead deed filed by Mr. Asghar does not contain this information. It appears from the debtors' schedules, however, that they have at least two qualifying dependents. Consequently, Mr. Asghar would be entitled to claim a $5,000 exemption on his own account and an additional $1,000 based on the two dependents.