This article talks about whether annuity contracts are protected from creditors in Florida. The authors argue that even private annuity contracts should be protected under the law, based on their analysis of the statute and previous court decisions. They believe that if the legislature didn’t specifically exclude private annuities from the law, then they should be included. The law protects annuities from being taken by creditors. The law doesn’t specify that it only applies to certain types of annuities, so it likely protects all annuities. Courts usually interpret laws based on their wording, and they usually try to give debtors the benefits of exemptions. So, it wouldn’t make sense for the law to only apply to certain types of annuities when it doesn’t say that. It would be like changing the law without the legislature’s approval. Plus, the law already says it doesn’t apply if the annuity was set up for the benefit of a creditor. So it seems like it should protect all annuities unless they were specifically set up to help a creditor. The article argues that the wording of a statute suggests that annuity contracts issued by private individuals should not be protected from creditors. It also discusses how creditors can reach assets held in a trust if the grantor has the right to receive payments from the trust. It mentions a court case where creditors were able to receive payments from a trust but not the remainder of the assets. The Brown court found that a person’s trust payments could not be taken by creditors, but the income could be. This is consistent with common law in most states. There are no well-known cases where a creditor can take assets from a trust, except for what is actually payable to the person at the time the creditor takes it. Even if a person sets up a trust and keeps the right to the income and the power to decide where the assets go, creditors still can’t take the trust’s main assets. When a person sets up a trust and gets payments from it, those payments should not be seen as benefits from the trust. The same goes for a trust set up with the Internal Revenue Code. In Florida, there are ways to protect your money from creditors using trusts and annuity contracts. These are legitimate tools for estate planning and can also provide some protection from creditors. However, there are some exceptions and it’s possible that a court could disagree with this interpretation. Overall, these tools can be helpful for managing your money and protecting it from creditors. This article discusses exemptions for annuity contracts in Florida law. It mentions court cases and legal statutes relating to these exemptions, and also talks about different estate tax planning tools like grantor-retained annuity trusts and charitable lead annuity trusts. The author is Alan S. Gassman, a lawyer from Gassman, Bates & Associates, P.A. This column is written by the Tax Section, with Frances D. McCoid Sheehy as the chair and Michael D. Miller and Benjamin Jablow as editors. David L. Koche is a lawyer at Law Firm A and got his law degree from School A. Michael C. Markham is a lawyer at Law Firm B and got his law degree from School B.
Source: https://www.floridabar.org/the-florida-bar-journal/creditors-rights-under-private-annuities-and-grantor-retained-annuity-trusts-in-florida/
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