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.
Annuities are divided between “immediate” annuities and “deferred” annuities. The immediate annuities start paying an income right away. Deferred annuities allow the growth of principal deposits inside the contract. In the future, the deferred annuities become like immediate annuities providing income from the higher Retirement Fund balance that has grown tax deferred over the years.
There is so much more information to be had on annuities and their benefits in a divorce where alimony or other assets are involved. Call us at 813-672-1900 or contact us by email, if you would like more information on how annuities can work for you if you are going through a divorce or otherwise.
*To offer insurance and annuity products I have arranged a strategic relationship with two very experienced estate planners. Rick D. Miller, CLU, ChFC, RHU and Scott F. Barnett, J.D., LL.M. (Taxation) have a combined 70 years of experience in the field. They have organized THE PLANNING PARTNERS to offer professional level services to individuals, families, and closely held businesses. Rick and Scott have taken the Collaborative Law Training Seminar and Scott is now a Certified Divorce Financial Analyst.
By Lynette Silon-Laguna Google+