Exemptions

Not All Annuities Are Protected From Florida Judgments

Not all annuities owned by Florida residents are protected from their creditors. Protection does not depend upon the type of annuity or the issuer of the annuity, but asset protection does depend upon the state where the annuity was issued to the debtor. People who purchased annuities in another state before moving to Florida may…

Bankruptcy Court Denies Wage Exemption By Self-Employed Business Owner

Exempting wages from garnishment under Florida’s head of household exemption is difficult for self-employed debtors. Business owners of sub-S corporations typically compensate themselves as employees and as owners. The owner pays himself salary as well as profit distributions. Self-employed business owners limit salary in order to minimize employment taxation, and instead, pay themselves mostly through…

Debtor Who Invades Child’s Minor Account Should Lose Asset Protection Benefits

Totten trusts and UTMA(“uniform gift to minors”) financial accounts have different consequences for asset protection  Totten trusts are not protected from creditors because the accounts could be revoked or invaded by the parent, whereas the UTMA accounts are  protected because deposits made to these accounts are legally irrevocable. The asset protection of the UTMA account…

Keogh Plan: Bankruptcy Court Denies Exemption To Debtor Who Is Sole Owner And Sole Participant

Section 222.21 of the Florida Statutes exempts retirement plans that have been pre-approved by the IRS as exempt from taxation pursuant to Section 401(a) of the Internal Revenue Code. In a recent bankruptcy proceeding the court considered a debtor’s claimed exemption of his tax deferred Keogh plan.

Workers’ Compensation Benefit Protection From Creditors

I consulted today with a client who is the beneficiary of a workers’ compensation award. He currently receives monthly workers’ comp payments, and he expects an additional lump sum settlement in the near future. A creditor recently received a large court judgment against this client. The client wanted to know if the judgment creditor could…

Life Insurance Proceeds: Are Death Benefits Exempt

A husband purchased a large life insurance policy naming his wife as beneficiary. The policy accumulated cash value. The husband and wife had joint creditors. The husband died and the insurance company paid the policy proceeds to the surviving spouse. The surviving wife asked me if the creditors can go after the life insurance proceeds