Can Parent's Gift to Child Be Protected From Child's Creditors?
I recently saw a question concerning a parent who wanted to give money to a child, but where the child had judgment creditors due to the child's failed business. The parent wanted suggestions how to give money to help the child without the gift being seized by the child's creditors.
A few suggestions come to mind. First, the parent could fund an annuity for the child. The child's interest in the annuity is exempt from creditors under Florida statutes. The annuity could be purchase from an insurance company or the parent could create a private annuity. Both are protected. Second, the parent could create and fund a trust for the child's benefit with an independent trustee. The trust agreement could provide that money be distributed to the child or for his benefit, but specifically prohibit any distribution to the child's creditors. If the trust agreement were otherwise properly drafted, the money should be protected from the child's creditors.
