The Asset Protection Guide For Florida Physicians
argument was that the legislature in granting annuities asset protection only meant “immediate annuities” and that a “variable annuity” prior to the Maturity Date is really akin to an investment account with an option to receive an annuity in the future. The court in In re Alan L. Goldenberg confirmed that variable annuities are protected even before their Maturity Date. This is obviously wonderful news to people who use these financial products to invest their assets. In stating the court’s holding that variable annuities are protected, the exact language they used was: “We . . . hold that the proceeds of an annuity contract where there is a surrender penalty are exempt from legal process by virtue of section 222.14. " Although the court did not elaborate on the underlined language in the court’s holding, it seems to indicate that annuities that do not have a surrender penalty may not be protected. A surrender penalty is a fee that the purchaser of an annuity must pay if the annuity is cancelled within a certain period of time after the annuity is purchased. Certain annuities, such as “no-load” annuities15, do not impose a surrender penalty, and may not offer the asset protection benefits of annuities with surrender penalties. In the event you are relying on annuities that never imposed a surrender penalty as a means of protecting your assets, you may be wise to convert them to annuities that do if it makes sense financially. It is not entirely clear whether an annuity that had a surrender penalty in the past but which has lapsed by the time the creditor is trying to reach the annuity assets would somehow lose its protection. I do not believe that the court intended this result but was merely referring to the existence of an initial surrender penalty. The “Beneficiary” of an Annuity is Entitled to Protection. You may remember that the exact language of the Florida Statute providing protection with respect to annuities is as follows:
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A “no-load” annuity is simply an annuity that does not pay a sales commission to the person who sold it to you. They are oftentimes sold by discount brokers.
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