It has long been established Florida law that a “spendthift provision” in a trust does not protect the trust beneficiary’s interest from claims for alimony or child support. This exception to trust protection was announced by the Florida Supreme Court in a 1985 decision. The principle was expressly included in Florida most recent trust code revision in 2006.
Client lives in California and has purchased a Virginia based 529 college savings. His financial adviser told him that Virginia plans offer advantageous investment options. The client says that Virginia law provides that Virginia 529 plans are exempt from creditor claims. The clients asks about the protection of his Virginia plan under California and Florida law.
Although most people’s IRAs consist of cash and marketable securities housed at a financial institution people may own real estate in an IRA that is “self-directed.” There are financial companies that set up and administer for a fee self-directed IRAs which allow the owner to buy a wide variety of assets including real estate, currencies, precious metals and commodities.
Do your Florida exemptions hold up when your judgment creditor is an agency of the U.S. government? One of my clients anticipates a judgment by the FDIC arising from his alleged violations of lending laws by a state bank the client previously owned and controlled.
A caller and prospective client called to ask whether his Florida annuity was exempt from creditors. The caller had purchased an annuity through the securities affiliate of his bank. The caller subsequently borrowed money from the bank, and the loan documents stated that the loan was secured by all assets held by the bank.
A client maintains a self-directed IRA which has purchased rental real estate. The real estate is titled in the name of the IRA. The IRA owns several properties as well as financial assets. A tenant filed a lawsuit.
A man called me seeking help with a wage garnishment instituted by a former business partner who had obtained a Florida money judgment related to their prior business relationship. He was employed by a company based in Washington state.
Some time ago I wrote a post about Florida residents who purchased an annuity for his own benefit before moving to Florida in a foreign state which did not recognize annuities as exempt from creditor execution.
Creditors cannot garnish wages paid to a person who is head of household. I have written previously about state court decisions which denied this exemption to debtors who were paid from a small business the debtor owned and controlled. State courts have made if it difficult for business owners to pay themselves exempt wages.
Florida law has a well-established tradition of protecting a beneficiary’s interest in a discretionary spendthrift trust. A “spendthrift trust” is an trust established for the benefit of another person, the beneficiary, which trust includes a provision that prohibits the beneficiary from voluntarily or involuntarily assigning his interest to a third party including the beneficiary’s creditors. The spendthrift trust is “discretionary” …