Comments on: Variable Annuities And Asset Protection http://amateurassetallocator.com/2008/08/13/variable-annuities-and-asset-protection/ Amateur Asset Allocator Fri, 19 Mar 2010 23:54:38 +0000 http://wordpress.org/?v=2.9 hourly 1 By: The Importance Of Paying Yourself First - Amateur Asset Allocator http://amateurassetallocator.com/2008/08/13/variable-annuities-and-asset-protection/comment-page-1/#comment-7163 The Importance Of Paying Yourself First - Amateur Asset Allocator Tue, 09 Feb 2010 11:01:42 +0000 http://amateurassetallocator.com/?p=259#comment-7163 [...] the big purchases in life, and you can even declare bankruptcy if need be (pay close attention to asset protection if you’re thinking of going that route), but there’s one thing you can’t borrow [...] [...] the big purchases in life, and you can even declare bankruptcy if need be (pay close attention to asset protection if you’re thinking of going that route), but there’s one thing you can’t borrow [...]

]]> By: Andys http://amateurassetallocator.com/2008/08/13/variable-annuities-and-asset-protection/comment-page-1/#comment-1606 Andys Wed, 13 Aug 2008 14:55:37 +0000 http://amateurassetallocator.com/?p=259#comment-1606 Great article and sheds a lot of light on a topic I know little about. Unfortunately I am not one of those high income professsional yet... Great article and sheds a lot of light on a topic I know little about. Unfortunately I am not one of those high income professsional yet…

]]> By: Jay Adkisson http://amateurassetallocator.com/2008/08/13/variable-annuities-and-asset-protection/comment-page-1/#comment-1603 Jay Adkisson Wed, 13 Aug 2008 13:34:52 +0000 http://amateurassetallocator.com/?p=259#comment-1603 "variable annuities hold no federal protection against creditors" In general, the federal courts look to the state exemption laws of the state where the federal district is located. So, a federal court sitting in Texas would apply Texas' exemption for annuities, including in a federal bankruptcy proceeding. IRAs and other qualified accounts are subject to a $1 million cap in bankruptcy under the bankrutpcy reform act of 2005, but annuities and life insurance were not capped in that Act. So, if annuities or life insurance have an unlimited exemption in a state, they will also have that unlimited exemption in bankruptcy. BTW, collection law does not typically distinguish between variable annuities and fixed annuities, i.e., they are all just "annuities" for creditor-debtor purposes. “variable annuities hold no federal protection against creditors”

In general, the federal courts look to the state exemption laws of the state where the federal district is located. So, a federal court sitting in Texas would apply Texas’ exemption for annuities, including in a federal bankruptcy proceeding.

IRAs and other qualified accounts are subject to a $1 million cap in bankruptcy under the bankrutpcy reform act of 2005, but annuities and life insurance were not capped in that Act. So, if annuities or life insurance have an unlimited exemption in a state, they will also have that unlimited exemption in bankruptcy.

BTW, collection law does not typically distinguish between variable annuities and fixed annuities, i.e., they are all just “annuities” for creditor-debtor purposes.

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