Asset Protection: Annuities, Life Insurance, and IRAs

Florida law offers multiple ways that individuals can shelter their assets from collection efforts by creditors. Specific classes and amounts of property are exempt under state law, which allows you to protect significant assets that fall within these classifications. Some of the vehicles that you can use for asset protection include annuities, life insurance policies, and IRAs.


Florida Statute § 222.14 exempts annuity contracts from legal process. This exemption is effective even after the owner of the annuity has received the money from the annuity. You also can continue to protect the annuity proceeds under this exemption after you deposit the funds in a financial account so long as you can accurately trace the funds back to the exempt annuity. You do not need to segregate the annuity proceeds in a separate account, but you do need to maintain a way to trace the money from the annuity to the account.

Life Insurance Policies

Life insurance policies’ cash value is also exempt under Florida Statute § 222.14. Like annuities, the cash value of the life insurance policy remains exempt even after you have received the money. Furthermore, the funds will remain protected if you deposit them into a financial account if you can trace them back to the original life insurance policy, even if not segregated.

However, if you invest the cash value of a life insurance policy into another type of asset, it may lose its exempt status. Although converting the funds into some assets may be permissible, such as a certificate of deposit at the same financial institution where you first held the funds in a savings account, the funds may not be exempt if you use them to purchase another asset. For instance, if you use the funds to purchase stocks, bonds at a different financial institution, or real estate, the funds are likely to lose their character as exempt.


Florida Statute § 222.21 exempts IRAs, pensions, 401(k) plans, and all other types of tax-deferred retirement accounts from creditors. This statute also includes pension plans specifically designated for certain professions, including teachers, government workers, firefighters, and police officers.

Furthermore, the Florida legislature amended this statute to include defined benefit plans as exempt from creditors, even with a sole owner participant. Although these plans may not be compliant with the Employee Retirement Security Act (ERISA), § 222.21 still specifically includes these plans as exempt. The U.S. Court of Appeals for the 11th Circuit also confirmed the exempt nature of non-ERISA complaint pension plans in the case of  In re Baker, 590 F. 3d 1261 (11th Cir. 2009).

The exemption for tax-deferred retirement accounts in § 222.21 includes both inherited and rollover IRAs. Although inherited IRAs are not exempt in some states, Florida’s legislature has extended statutory protection to these assets.

Contact Kramer Green to Learn More About Protecting Your Assets

The asset protection lawyers of Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. are ready to assist you throughout the process of protecting your assets. We know how hard you have worked to accumulate these assets. Our objective is to create an individualized plan that best protects your assets for the benefit of you and your family. Contact our office today at (954) 966-2112 or reach out to us online to schedule a time to discuss your legal issues with our attorneys.

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