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Annuities, a possible +Ve. (In Florida at least) - Please Control Your Excitement
03-05-2018, 06:48 AM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,725
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Annuities, a possible +Ve. (In Florida at least) - Please Control Your Excitement
I know we at mostly adverse to Annuities because of Fees and a multitude of other reasons. However, I think I "may" have found a possible positive to Annuities in Florida and maybe other states.
I was reading that in case of litigation in Florida certain assets are protected, IRAs, Roths, Main Residence, Insurance Policies, Retirement SS Income and maybe a few others.
Does this make Annuities, assuming the protections offered to combat todays litigious society, attractive for some.
Here is an example:
Say one has a $5m portfolio of which $1m is cash in the bank, CDs etc. and $4m is in retirement accounts invested wherever. Would putting $1m into an Annuity of some kind protect ALL of one assets from a Law Suit?
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03-05-2018, 06:53 AM
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#2
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,729
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Seems to me that keeping my assets invested in low cost equities & fixed income and taking out umbrella liability insurance is more practical and a lot less expensive.
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03-05-2018, 06:59 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,725
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Quote:
Originally Posted by MichaelB
Seems to me that keeping my assets invested in low cost equities & fixed income and taking out umbrella liability insurance is more practical and a lot less expensive.
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This maybe true, but what if say one's total unprotected assets are say $1m and you have $1m Umbrella policy, then the judgement is say $2m, would your $1m moneys be at forfeit in this case? All of this is purely hypothetical of course as if you have a judgement against you then buy an annuity, it would be void.
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"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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03-05-2018, 07:03 AM
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#4
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Not the way I'd go, but:
https://www.marketwatch.com/story/ho...ors-2013-10-08
Are you concerned with an imminent lawsuit? Or are you looking for a reason to justify a purchase of an annuity you would like? Or something else?
If you are trying to make yourself judgement-proof, you need to work with an attorney and a CPA.
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03-05-2018, 07:04 AM
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#5
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,729
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First, even in this "litigious society", a lawsuit is still a low probability event. In addition, the amount of liability coverage needed is not based on the amount of assets one has, but instead to the typical lawsuit / settlement amount.
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03-05-2018, 07:09 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,300
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Quote:
Originally Posted by MichaelB
Seems to me that keeping my assets invested in low cost equities & fixed income and taking out umbrella liability insurance is more practical and a lot less expensive.
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^^^
This is what I do and do live in Florida, but will research further.
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TGIM
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03-05-2018, 07:12 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,725
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Quote:
Originally Posted by joeea
NAre you concerned with an imminent lawsuit? Or are you looking for a reason to justify a purchase of an annuity you would like? Or something else?
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No not at all, I was just reading about it this weekend. I actually have an umbrella policy myself.
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"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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03-05-2018, 12:11 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,691
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Quote:
Originally Posted by MichaelB
Seems to me that keeping my assets invested in low cost equities & fixed income and taking out umbrella liability insurance is more practical and a lot less expensive.
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Depends, umbrella policies usually have exceptions to coverage.
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03-05-2018, 12:38 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2017
Location: Western NC
Posts: 4,633
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Quote:
Originally Posted by ShokWaveRider
This maybe true, but what if say one's total unprotected assets are say $1m and you have $1m Umbrella policy, then the judgement is say $2m, would your $1m moneys be at forfeit in this case? All of this is purely hypothetical of course as if you have a judgement against you then buy an annuity, it would be void.
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Even $5 million in umbrella coverage is not as much as you might think.
Also, people seem awfully flippant about the time and effort involved to actually win a court judgment.
The last one in which I was involved (personal injury claim against a business) took over 5 years after the plaintiff rejected a $2 million (IIRC) offer from the insurer.
Granted, they had significant, permanent injuries but the end result was that the plaintiff (and more importantly their family, since the plaintiff was the sole breadwinner) got bupkis at trial.
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03-05-2018, 01:00 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,377
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Quote:
Originally Posted by ShokWaveRider
I know we at mostly adverse to Annuities because of Fees and a multitude of other reasons. However, I think I "may" have found a possible positive to Annuities in Florida and maybe other states.
I was reading that in case of litigation in Florida certain assets are protected, IRAs, Roths, Main Residence, Insurance Policies, Retirement SS Income and maybe a few others.
Does this make Annuities, assuming the protections offered to combat todays litigious society, attractive for some.
Here is an example:
Say one has a $5m portfolio of which $1m is cash in the bank, CDs etc. and $4m is in retirement accounts invested wherever. Would putting $1m into an Annuity of some kind protect ALL of one assets from a Law Suit?
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From what you wrote, it would depend on what sort of account the annuity is in. If you directly owned the annuity it is probably the same exposure as a taxable account other than the plaintiff can only commandeer the annuity stream of payments and not a lump sum. If the annuity was owned in an IRA then it would be protected just like stocks in an IRA.
IOW, it is the form of account that is important, not the type of investment.
I'm not a lawyer, and I didn't sleep at Holiday Inn Express last night..... so YMMV.
P.S. For a relatively modest cost, my insurer has millions of reasons to provide me with a vigorous defense should I be sued.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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03-05-2018, 01:29 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 2,223
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It is my understanding that whenever a longtime member starts an Annuity thread, the member is put on ER-ORG Double Secret Probation
PS Umbrella coverage is fairly cheap, but exclusions have crept in over the years.
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" A person is smart, but People are dumb, dangerous, panicky animals, and you know it " Agent "K", Men in Black
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03-05-2018, 02:01 PM
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#12
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Recycles dryer sheets
Join Date: Dec 2016
Posts: 413
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It can’t be “Double *Secret* Probation” if it’s posted
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03-06-2018, 11:22 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Jun 2017
Location: Western NC
Posts: 4,633
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Quote:
Originally Posted by Lakewood90712
PS Umbrella coverage is fairly cheap, but exclusions have crept in over the years.
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such as?
IIRC most of the excess risk to the umbrella is due to auto, so is DUI now excluded?
All umbrella policies I've seen have a household exclusion, but I don't believe that's anything new, so the advice I've read is to crank uninsured/underinsured to the (typically $1 million) maximum under your auto policy.
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