One of my asset protection consultations this week was with a military attorney. His job is traveling around to military sites, both domestic and in combat areas, to advise soldiers about their V.A. benefits. Interesting job.In any event, my client had some civil creditor problems. His personal assets included a “Thrift Savings Plan” with the government and a stream of disability payments from a V.A. disability insurance policy. Neither of these assets are not clearly exempted in the Florida statutes.
The client’s V.A. disability policy could be exempt under Florida Statute 222.18 which protects, “disability income benefits under any policy or contract of life, health, accident, or other insurance…. I think a creditor attorney could argue that V.A. benefits are not protected by this statute because they are not due pursuant to a disability “policy or contract” as they are automatic benefits given to all military employees by virtue of their service. I think most courts would reject that distinction. Nevertheless, the providing to V.A. disability to our soldiers provides independent protection. The federal V.A. laws provide that benefits administered by the V.A. are exempt from claims of creditors before or after receipt.
This client’s Thrift Plan is a government retirement benefit. Florida Statute 222.21 exempts retirement plans that are tax deferred under any of the IRC sections listed in the statute. The Thrift Plan does not appear to fall within any of the IRC code sections listed in that statute, and therefore, it may not be protected under Florida’s law. But again, the federal law provides its own protection. Federal law characterizes the government’s Thrift Savings Plan as a retirement program and provides that any money in a Thrift Saving Fund is not subject to levy, attachment or garnishment.
The point of this story is that sometimes a debtor has to look beyond the Chapter 222 of the Florida statutes (the main exemption chapter) for creditor protection. There are some exemptions (social security is another one) which are provided by federal law and are not explained anywhere in our statutes. There are exemptions for some assets (mobile homes, for instance) that are provided in statutes outside Chapter 222. You need to see the whole picture.
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