Annuities

This is a tricky area.  I hit the books and do some research whenever I have a bankruptcy client with an annuity.  But here are some authorities to get started on your research.

703 Exemptions

C.C.P. § 703.140(b)(10)(E)
An exemption is allowed for any payment under a stock, bonus, pension, profit-sharing,
annuity, or similar plan on account of illness, death, disability, age, or length of service,
to the extent reasonably necessary for the support of the debtor, his or her
spouse and any dependents. This exemption applies to IRA accounts which are exempt
to the extent required for the debtor’s support at retirement.
Courts have ruled that what is reasonably necessary for the support of the debtor should be sufficient to sustain basic needs, and not related to the debtor’s former status in society or lifestyle to which he or she is accustomed.

704 exemptions

C.C.P. § 704.100

Benefits from matured life insurance or annuity policies are exempt to the extent reasonably necessary for the support of the debtor and his or her spouse or dependents.

The language of this statute could easily be read to include life insurance or annuities. But the court held that if the fund is to be exempt it must be life insurance which may (or may not) also have an annuity feature. If the debtor purchases an annuity for himself which will pay him monthly payments in the future that is considered “an investment” not life insurance. But if the debtor purchases a life insurance policy which pays the beneficiary in the form of annuity that would qualify under this exemption.

See:

In re Frances PIKUSH, Debtor. James L. KENNEDY, Chapter 7 Trustee, Appellant,
v. Frances PIKUSH; First San Antonio Capital; Resolution Trust Corporation, Receiver of Occidental Nebraska; United States Trustee, Appellees. 157 B.R. 155 (1993)

https://www.courtlistener.com/opinion/1869012/in-re-pikush/

704.115 exempts “private retirement plans” to the extent the amounts held in the plans, annuities, or accounts do not exceed the maximum amounts exempt from federal income taxation to the extent are exempt only to the extent necessary to provide for the support
of the judgment debtor when the judgment debtor retires.

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