Exemption of Annuities in Florida

Annuities issued to citizens or residents of Florida are generally exempt from the creditors of the beneficiary of the annuity. Florida Statute section 222.14 provides that "the proceeds of annuity contracts issued to citizens or residents of the state,  upon whatever form, shall not in any case be liable to attachment, garnishment         or legal process in favor of any creditor ... of the person who is the beneficiary of such annuity contract, unless the  ... annuity contract was effected for the benefit of such creditor.
Although the application of this exemption would seem to be straightforward, it has presented may questions to courts over the years, such as: 

• what constitutes an "annuity"
• what is a "beneficiary" 

A recent case dealt with the question of whether an ex-wife was a "beneficiary" of an annuity. Connor v. Seaside National Bank, 2014 WL 1245340 (5th DCA 2014). In this case the annuities were purchased by a former husband and were distributed to the ex-wife in the final judgment of the dissolution of marriage. During the process while the annuities were being transferred into the ex-wife's name, a creditor obtained a judgment against her and served a writ of garnishment on the annuity company. The ex-wife asserted that the the annuities were exempt under the provisions of section 222.14.  
The lower court held that the annuity contract were not exempt as the ex-wife was not yet the named annuitant and was not the "beneficiary" of the proceeds of the annuity contracts. The Court of Appeals revered this decision and held that the annuity contracts were exempt under section 222.14. 
The Court of Appeals explained that the term "beneficiary" is not defined in the statute and determined the meaning of the term "beneficiary" based on its ordinary meaning which is found to be a "party who will benefit from a transfer of property or other arrangement."  The Court found that the ex-wife was a "beneficiary" as she was entitled to payment of the proceeds of the annuities in accordance with the divorce judgment. (305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases and Mortgage Modifications