Use of Annuities to Improve How Alimony Works

All Family Law Group, P.A., is collaborating with The Planning Partners* to help our divorcing clients to improve their chances for an alimony settlement beneficial to both parties.  Annuity contracts can provide a combination of either more benefits for the same money or at less cost for the same benefits and they can deal with most contingencies alimony agreements include.Some of the benefits of having an annuity as opposed to providing alimony payments are as follows:

• The receiving spouse has a certainty of payment as a highly regulated insurance or annuity company provides the payments.
• There is no necessity of having to motion the court for enforcement of the alimony provisions of a Final Judgment if the ordered or agreed upon payments are not made.
• The payor does not have to make payments or have the payments deducted from his or her income through an income deduction order.
•  If the payor’s income goes down because of reduced income from employment, illness, or he or she retires or dies, the annuity payments will remain the same for the former spouse and the payor will not have to seek a reduction modification through the court of the alimony he or she is paying.  Alimony normally terminates upon the death of the payor.
• Annuities allow the opportunity to obtain more benefits for the same amount of money or to save money to provide the same benefits agreed upon.  This occurs because insurance and annuity contracts provide for interest and other benefits that creates amounts in addition to the principal payment to be paid to the receiving spouse.
• The spouse may receive income for terms of 5, 10, or 20 years, for example, or income for life.  However, the amount received will be more the shorter the term of payment.
• Annuity contracts are exempt from creditors in the event of a bankruptcy, which means that all of the funds survive a bankruptcy.
• Income taxes are deferred on the build-up of interest income in a deferred indexed annuity, including the new 3.8% Medicare Tax on passive income, if applicable.