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Fun with annuities
Posted: Sun Dec 02, 2012 3:31 pm
by Yahoo Bot
Hank;
Client #1: Anything in an IRA is exempt whether stocks, bonds,
annuities, what have you. It sounds like it's an IRA account, so it is
exempt. However, if it is not in an IRA, not exempt.
Client #2: Not enough information. Are the annuities in an IRA or
ERISA-qualified retirement account? I'd say the broker may have some
malpractice if not.
Steven B. Lever
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Fun with annuities
Posted: Sun Dec 02, 2012 3:25 pm
by Yahoo Bot
Nothing terrifies me more than exempting a $100k annuity. I've read some case law and the CA statutes but I'd like to throw these out for consideration.
1. Debtor received half of her ex-husband's exempt profit sharing plan in her 1993 divorce. In 2003 she moved the funds to an "IRA/annuity" at Wells. Debtor has never commingled or withdrawn any of the funds.
The docs used to open the account say IRA but on her statements the account is described as an annuity. She doesn't take any money from the account because it appears that there are tax penalties because she isn't 59 1/2 yet. The docs point to distribution but there doesn't appear to be any like insurance qualities to the annuity.
Exempt?
2. Debtor (different person) started a 401k for herself when she ran her own business, a corporation. When she closed the business in 2010, she was told she couldn't have the 401k any more and she rolled the funds into three single-payment life insurance annuities.
Exempt?
Comments appreciated.
Henry Paloci, Esq.
805.498.5500
The post was migrated from Yahoo.