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Disability Insurance Payments
Michael,
Isee704.080as referring only to SSDI. SSDI is paid into thedeposit account (a defined term)and stays exempt (even if comingled with other funds) up to the limits under 704.080(b) pursuant to 704.080(c).
Regardingprivate disability benefits, the provisionsof 704.130 are pretty much the same as those for workers compensation awards under 704.160. Both are exempt without making a claim prior to payment and after payment they are exempt if a timely claim is made and the funds are traceable. Both are subject to support judgments which suggest that other creditors can't reach the benefits after payment, provideda claim of exemptionis timely made and the funds are traceable.
I looked for case law on this issue a few years ago and couldn't find any, so I advised my client that this issue appears to be one offirst impression and istherefore risky.Peter M. Lively, J.D., M.B.A.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
Telephone: (310) 391-2400* Toll Free: (800) 307-3328 * Fax: (310) 391-2462
On Wednesday, June 24, 2015 6:54 PM, "Michael Avanesian michael@avanesianlaw.com [cdcbaa]" wrote:
Hello, I have a question regarding exemption of proceeds from disability insurance.
Basic fact pattern is hypothetical client is injured, his disability insurance pays him $20,000 per month. Suppose he is able to squirrel away $10k of this every month in a segregated account. Is that amount exempt?
I found two statutes on point that make it seem like the money is exempt but I am certain the money is not exempt!! Below is 704.080(a)(2). Emphasis added.
(2)Social security benefits means payments authorized by the Social Security Administration for regular retirement and survivors benefits, supplemental security income benefits, coal miners
(b)A deposit account is exempt without making a claim in the following amount: ....
(c)The amount of a deposit account that exceeds the exemption provided in subdivision (b) is exempt to the extent that it consists of payments of public benefits or social security benefits.
Alternatively, there is 704.130.(a)Before payment, benefits from a disability or health insurance policy or program are exempt without making a claim. After payment, the benefits are exempt.
Where am I going wrong in my analysis? Can this guy really have $500k in the bank, completely exempt?
Sincerely,
Michael Avanesian, Esq.Simon Resnik Hayes, LLP15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403Tel: 818.783.6251 | Cel: 818.817.1725
Confidentiality:This electronic transmission and its contents are legally privileged and confidential information and intended solely for the use of the addressee. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution, copying or other use of this message and its contents is strictly prohibited. If you have received this transmission in error, please reply to us immediately and delete this message from your directory.IRS Circular 230 Disclosure:To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
The post was migrated from Yahoo.
Reply-To: Craig J Beauchamp
X-Original-Return-Path: Craig J Beauchamp
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Michael,
I had a similar situation years ago. You need to take a look at the award
letter to determine if any part of those funds are for equipment, medical
devices, special vehicles, etc. You would also have to provide proof that
all the funds in the savings account fame from SSDI benefits. $20k a month
is extremely high unless maybe he was a very high 6 figure earner?
In my case, the debtor received, in addition to his SSDI benefits, $36,000
a year for transportation needs paid out of a Medicare Trust as well as
other annual payouts for special equipment and devices. I had to get a
copy of the Medicare Trust, the award letters, etc. for the Trustee. In
addition, I had to provide Trustee several years of bank statements showing
the money coming in and being transferred into a savings account. Lots of
work but worth it.
Craig
Craig J. Beauchamp, Esq.
Of Counsel
Law Offices of Victor W. Luke, APLC
(714) 835-5091
(714) 835-5763
Craig J. Beauchamp, Esq.
Attorney at Law
PO Box 25857
Santa Ana, CA 92799
(949) 689-9709
(714) 835-5763 fax
Legallycraig@gmail.com
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept notice for *Ex
Parte* Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and
delete this e-mail from your system.
On Wed, Jun 24, 2015 at 6:54 PM, Michael Avanesian michael@avanesianlaw.com
[cdcbaa] wrote:
>
>
> Hello, I have a question regarding exemption of proceeds from disability
> insurance.
>
> Basic fact pattern is hypothetical client is injured, his disability
> insurance pays him $20,000 per month. Suppose he is able to squirrel away
> $10k of this every month in a segregated account. Is that amount exempt?
>
> I found two statutes on point that make it seem like the money is exempt
> but I am certain the money is not exempt!! Below is 704.080(a)(2). Emphasis
> added.
>
> (2) l
> Security Administration for regular retirement and survivors benefits,
> supplemental security income benefits, coal miners health benefits, *and
> disability insurance benefits*.
>
> (b) A deposit account is exempt without making a claim in the following
> amount: ....
> (c) The amount of a deposit account that exceeds the exemption provided in
> subdivision (b) is exempt to the extent that it consists of payments of
> public benefits or social security benefits.
>
> Alternatively, there is 704.130.
> (a) Before payment, benefits from a disability or health insurance policy
> or program are exempt without making a claim. *After payment, the
> benefits are exempt*.
>
> Where am I going wrong in my analysis? Can this guy really have $500k in
> the bank, completely exempt?
>
> Sincerely,
>
> *Michael Avanesian, Esq. *
> Simon Resnik Hayes, LLP
> 15233 Ventura Blvd., Suite 250
> Sherman Oaks, CA 91403
> Tel: 818.783.6251 | Cel: 818.817.1725
>
> *Confidentiality**: *This electronic transmission and its contents are
> legally privileged and confidential information and intended solely for the
> use of the addressee. If the reader of this message is not the intended
> recipient, you are hereby notified that any dissemination, distribution,
> copying or other use of this message and its contents is strictly
> prohibited. If you have received this transmission in error, please reply
> to us immediately and delete this message from your directory.
>
> *IRS Circular 230 Disclosure:* To ensure compliance with requirements
> imposed by the IRS, please be advised that any U.S. federal tax advice
> contained in this communication (including any attachments) is not intended
> or written to be used or relied upon, and cannot be used or relied upon,
> for the purpose of (i) avoiding penalties under the Internal Revenue Code,
> or (ii) promoting, marketing or recommending to another party any
> transaction or matter addressed herein.
>
>
>
Michael,I had a similar situation years ago. You need to take a look at the award letter to determine if any part of those funds are for equipment, medical devices, special vehicles, etc. You would also have to provide proof that all the funds in the savings account fame from SSDI benefits. $20k a month is extremely high unless maybe he was a very high 6 figure earner?In my case, the debtor received, in addition to his SSDI benefits, $36,000 a year for transportation needs paid out of a Medicare Trust as well as other annual payouts for special equipment and devices. I had to get a copy of the Medicare Trust, the award letters, etc. for the Trustee. In addition, I had to provide Trustee several years of bank statements showing the money coming in and being transferred into a savings account.>Craig J. Beauchamp, Esq.Of CounselLegallycraig@gmail.comNO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL:s via voicemail or by email. You must comply with California Law and give notice to a person in my office during regular business hours.CONFIDENTIALITY STATEMENT: This message contains privileged and confidential information and is intended only for the individual named. If you are not the intended recipient you should not disseminate, distribute, store, print, copy or deliver this message. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system.
On Wed, Jun 24, 2015 at 6:54 PM, Michael Avanesian michael@avanesianlaw.com [cdcbaa] <cdcbaa@yahoogroups.com> wrote:
Hello, I have a question regarding exemption of proceeds from disability insurance.Basic fact pattern is hypothetical client is injured, his disability insurance pays him $20,000 per month. Suppose he is able to squirrel away $10k of this every month in a segregated account. Is that amount exempt?I found two statutes on point that make it seem like the money is exempt but I am certain the money is not exempt!! Below is 704.080(a)(2). Emphasis added.
The post was migrated from Yahoo.
X-Original-Return-Path: Craig J Beauchamp
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Michael,
I had a similar situation years ago. You need to take a look at the award
letter to determine if any part of those funds are for equipment, medical
devices, special vehicles, etc. You would also have to provide proof that
all the funds in the savings account fame from SSDI benefits. $20k a month
is extremely high unless maybe he was a very high 6 figure earner?
In my case, the debtor received, in addition to his SSDI benefits, $36,000
a year for transportation needs paid out of a Medicare Trust as well as
other annual payouts for special equipment and devices. I had to get a
copy of the Medicare Trust, the award letters, etc. for the Trustee. In
addition, I had to provide Trustee several years of bank statements showing
the money coming in and being transferred into a savings account. Lots of
work but worth it.
Craig
Craig J. Beauchamp, Esq.
Of Counsel
Law Offices of Victor W. Luke, APLC
(714) 835-5091
(714) 835-5763
Craig J. Beauchamp, Esq.
Attorney at Law
PO Box 25857
Santa Ana, CA 92799
(949) 689-9709
(714) 835-5763 fax
Legallycraig@gmail.com
NO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL: I do not accept notice for *Ex
Parte* Applications via voicemail or by email. You must comply with
California Law and give notice to a person in my office during regular
business hours.
CONFIDENTIALITY STATEMENT: This message contains privileged and
confidential information and is intended only for the individual named. If
you are not the intended recipient you should not disseminate, distribute,
store, print, copy or deliver this message. Please notify the sender
immediately by e-mail if you have received this e-mail by mistake and
delete this e-mail from your system.
On Wed, Jun 24, 2015 at 6:54 PM, Michael Avanesian michael@avanesianlaw.com
[cdcbaa] wrote:
>
>
> Hello, I have a question regarding exemption of proceeds from disability
> insurance.
>
> Basic fact pattern is hypothetical client is injured, his disability
> insurance pays him $20,000 per month. Suppose he is able to squirrel away
> $10k of this every month in a segregated account. Is that amount exempt?
>
> I found two statutes on point that make it seem like the money is exempt
> but I am certain the money is not exempt!! Below is 704.080(a)(2). Emphasis
> added.
>
> (2) l
> Security Administration for regular retirement and survivors benefits,
> supplemental security income benefits, coal miners health benefits, *and
> disability insurance benefits*.
>
> (b) A deposit account is exempt without making a claim in the following
> amount: ....
> (c) The amount of a deposit account that exceeds the exemption provided in
> subdivision (b) is exempt to the extent that it consists of payments of
> public benefits or social security benefits.
>
> Alternatively, there is 704.130.
> (a) Before payment, benefits from a disability or health insurance policy
> or program are exempt without making a claim. *After payment, the
> benefits are exempt*.
>
> Where am I going wrong in my analysis? Can this guy really have $500k in
> the bank, completely exempt?
>
> Sincerely,
>
> *Michael Avanesian, Esq. *
> Simon Resnik Hayes, LLP
> 15233 Ventura Blvd., Suite 250
> Sherman Oaks, CA 91403
> Tel: 818.783.6251 | Cel: 818.817.1725
>
> *Confidentiality**: *This electronic transmission and its contents are
> legally privileged and confidential information and intended solely for the
> use of the addressee. If the reader of this message is not the intended
> recipient, you are hereby notified that any dissemination, distribution,
> copying or other use of this message and its contents is strictly
> prohibited. If you have received this transmission in error, please reply
> to us immediately and delete this message from your directory.
>
> *IRS Circular 230 Disclosure:* To ensure compliance with requirements
> imposed by the IRS, please be advised that any U.S. federal tax advice
> contained in this communication (including any attachments) is not intended
> or written to be used or relied upon, and cannot be used or relied upon,
> for the purpose of (i) avoiding penalties under the Internal Revenue Code,
> or (ii) promoting, marketing or recommending to another party any
> transaction or matter addressed herein.
>
>
>
Michael,I had a similar situation years ago. You need to take a look at the award letter to determine if any part of those funds are for equipment, medical devices, special vehicles, etc. You would also have to provide proof that all the funds in the savings account fame from SSDI benefits. $20k a month is extremely high unless maybe he was a very high 6 figure earner?In my case, the debtor received, in addition to his SSDI benefits, $36,000 a year for transportation needs paid out of a Medicare Trust as well as other annual payouts for special equipment and devices. I had to get a copy of the Medicare Trust, the award letters, etc. for the Trustee. In addition, I had to provide Trustee several years of bank statements showing the money coming in and being transferred into a savings account.>Craig J. Beauchamp, Esq.Of CounselLegallycraig@gmail.comNO EX-PARTE NOTICE VIA VOICE MAIL OR EMAIL:s via voicemail or by email. You must comply with California Law and give notice to a person in my office during regular business hours.CONFIDENTIALITY STATEMENT: This message contains privileged and confidential information and is intended only for the individual named. If you are not the intended recipient you should not disseminate, distribute, store, print, copy or deliver this message. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system.
On Wed, Jun 24, 2015 at 6:54 PM, Michael Avanesian michael@avanesianlaw.com [cdcbaa] <cdcbaa@yahoogroups.com> wrote:
Hello, I have a question regarding exemption of proceeds from disability insurance.Basic fact pattern is hypothetical client is injured, his disability insurance pays him $20,000 per month. Suppose he is able to squirrel away $10k of this every month in a segregated account. Is that amount exempt?I found two statutes on point that make it seem like the money is exempt but I am certain the money is not exempt!! Below is 704.080(a)(2). Emphasis added.
The post was migrated from Yahoo.
Hello, I have a question regarding exemption of proceeds from disability
insurance.
Basic fact pattern is hypothetical client is injured, his disability
insurance pays him $20,000 per month. Suppose he is able to squirrel away
$10k of this every month in a segregated account. Is that amount exempt?
I found two statutes on point that make it seem like the money is exempt
but I am certain the money is not exempt!! Below is 704.080(a)(2). Emphasis
added.
(2) Social security benefits means payments authorized by the Social
Security Administration for regular retirement and survivors benefits,
supplemental security income benefits, coal miners health benefits, *and
disability insurance benefits*.
(b) A deposit account is exempt without making a claim in the following
amount: ....
(c) The amount of a deposit account that exceeds the exemption provided in
subdivision (b) is exempt to the extent that it consists of payments of
public benefits or social security benefits.
Alternatively, there is 704.130.
(a) Before payment, benefits from a disability or health insurance policy
or program are exempt without making a claim. *After payment, the benefits
are exempt*.
Where am I going wrong in my analysis? Can this guy really have $500k in
the bank, completely exempt?
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
*Confidentiality**: *This electronic transmission and its contents are
legally privileged and confidential information and intended solely for the
use of the addressee. If the reader of this message is not the intended
recipient, you are hereby notified that any dissemination, distribution,
copying or other use of this message and its contents is strictly
prohibited. If you have received this transmission in error, please reply
to us immediately and delete this message from your directory.
*IRS Circular 230 Disclosure:* To ensure compliance with requirements
imposed by the IRS, please be advised that any U.S. federal tax advice
contained in this communication (including any attachments) is not intended
or written to be used or relied upon, and cannot be used or relied upon,
for the purpose of (i) avoiding penalties under the Internal Revenue Code,
or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.
Hello, I have a question regarding exemption of proceeds from disability insurance.Basic fact pattern is hypothetical client is injured, his disability insurance pays him $20,000 per month. Suppose he is able to squirrel away $10k of this every month in a segregated account. Is that amount exempt?I found two statutes on point that make it seem like the money is exempt but I am certain the money is not exempt!! Below is 704.080(a)(2). Emphasis added.
The post was migrated from Yahoo.