Legal Note - Foreign Annuities

Many Floridians are aware of the creditor protection afforded Florida annuities. Interestingly, foreign annuities may offer even greater protection. Several foreign countries offer creditor protected annuities. Such foreign annuities may not generally be reached by creditors unless funded to avoid a creditor claim. Proving such a fraudulent conveyance is, however, generally difficult, in light of the typical judicial policy to promote investment in the off-shore financial system. Moreover, several off-shore havens do not allow for collection of foreign judgments within their borders. Therefore a judgment creditor in, for example, New York, cannot generally use its judgment to collect against an annuity written in Switzerland. Moreover, several jurisdictions have passed “anti-duress” laws. Such laws are intended to eliminate the forced repatriation of annuity funds to a more creditor friendly jurisdiction. The anti-duress rules generally therefore prohibit the issuing insurance company (in the debtor friendly country) from transferring annuity assets to a creditor friendly jurisdiction, even if demanded by a U.S. (or other) court.

Gary Forster is a Florida native practicing in all areas of business transactions, personal planning and tax matters, both domestic and international. Gary handles a variety of corporate, personal and tax planning matters, ranging from wealth protection and corporate structuring to complex business reorganizations. Mr. Forster has designed and drafted hundreds of asset protection plans involving domestic and foreign corporate and trust structures. Gary is a member of both the Florida Bar (admitted October 8, 1993) and District of Columbia Bars (admitted February 6, 1995), including bar sections for international and tax law. Gary is also a member of the U.S. Tax Court. Gary earned an undergraduate degree from Tufts University in 1990, graduating cum laude, with majors in Spanish Literature and Economics. Gary graduated from law school at the University of Florida in 1993 with honors. Gary earned the Masters in Taxation degree in 1994 from the University of Florida where he was a graduate fellow. Mr. Forster writes and lectures frequently on international tax, corporate law and asset protection issues. Gary speaks Spanish fluently.

Circular 230 Disclosure: PURSUANT TO INTERNAL REVENUE SERVICE CIRCULAR 230, WE ARE NOT PERMITTED TO RENDER CERTAIN TAX OPINIONS UNLESS WE CONDUCT AN INDEPENDENT INVESTIGATION OF THE RELEVANT FACTS OF A TRANSACTION. AS THE ABOVE NOTE WAS PREPARED TO PROVIDE GENERAL INFORMATION TO OUR CLIENTS AND CONTACTS, WE HAVE NOT COMPLETED THIS INDEPENDENT INVESTIGATION. THIS ARTICLE MAY NOT THEREFORE BE RELIED UPON AS LEGAL ADVISE OR FOR THE PURPOSE OF AVOIDING FEDERAL TAX PENALTIES OR PROMOTING, MARKETING, OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED MATTERS ADDRESSED HEREIN. ANY TAX ADVICE CONTAINED HEREIN IS NOT INTENDED OR WRITTEN TO BE USED AND CANNOT BE USED BY A TAXPAYER FOR SUCH PURPOSES.