Annuity Contracts May Allow The Beneficiary To Avoid Writs Of Garnishment

The Fifth District Court of Appeal of Florida recently held that beneficiaries of annuity contracts are exempt from garnishment pursuant to Florida Statute §222.14.In Connor v. Seaside Nat’l Bank, 2014 WL 1255340, a settlement in a dissolution of marriage distributed a substantial part of the ex-husband’s annuities to his ex-wife, Rebecca.Subsequently, Seaside National Bank obtained a judgment against Rebecca and issued writs of garnishment on Rebecca’s two annuity policies.

The Bank argued that Rebecca was not a “beneficiary” under §222.14 because she was not the named annuitant.The lower court agreed and Rebecca appealed.The District Court reversed and held that while §222.14 provides exemption from garnishment for annuity proceeds in favor of a beneficiary, the statute does not define the term “beneficiary.”In construing the term in its plain and ordinary meaning, Black’s Law Dictionary defines “beneficiary” as “a party who will benefit from a transfer of property or other arrangement.”While the Bank argued that only a named annuitant under the annuity contract can be the “beneficiary,” the District Court held that all of Rebecca’s ex-husband’s contractual rights transferred to Rebecca thereby making her an owner of her a “beneficiary” as required by §222.14.

Advice:

This case was distinguished by In re Pizzi, 153 B.R. 357 (Bankr.S.D.Fla. 1993) in where a “nominee” under a lottery annuity was not a beneficiary.In that case, the state received and made use of the proceeds and the nominee had no right to assert a claim against the annuity.