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Many people wonder if annuities can protect their assets from lawsuits or creditors. This question came up again when I spoke with an estate planning attorney from Florida. He wasn’t calling me for legal advice. He wanted help choosing an annuity that might protect his after-tax savings.

He already knew the rules. But he reminded me of something important: different states give different levels of protection. Some states shield annuity money very strongly. Others only offer small protections. A few offer almost none.

This is why the answer to the question, can annuities protect your assets, is simple. Yes, they can. But how much protection you get depends entirely on where you live.

Why Someone May Want Asset Protection

The attorney I spoke with was not in trouble. He simply thinks ahead, like many lawyers do. He has both IRA money and non-qualified money. His IRA is already protected under ERISA, which covers things like 401(k)s and traditional retirement plans.

But his after-tax money does not have that same automatic protection. That is why he asked about putting all of his non-qualified money into an annuity. His goal was simple. He wanted a shield around those assets in case someone tried to sue him in the future.

Many people think this way. They want:

• Protection from unwanted lawsuits
• Protection from future creditors
• Protection for their family
• A safe place for long-term savings

Annuities can help with these goals, depending on the state rules.

Three Levels of Protection States Offer

Each state falls into one of three categories. These categories explain how much safety an annuity might give you.

Here is a simple table from the ideas discussed in the transcript:

Protection Level	What It Means	Example Notes
Unlimited protection	Strong shield around annuity funds	Florida and Texas are examples
Limited or conditional protection	Some protection, but only what is necessary	Often based on income needs or beneficiary types
Little or no protection	Very small or unclear protections	Some states fall into this category

These categories matter because they decide how safe your annuity money might be.

States With Unlimited Protection

Florida and Texas offer the strongest protections. In Florida, statute 222.14 says that the cash value and payouts from an annuity cannot be taken by creditors. This protection is usually unlimited. Texas is very similar.

This is one reason many people move to those states. They not only offer warm weather. They offer warm protection for your money too.

If you live in one of these states, an annuity can be a powerful tool for shielding your assets.

States With Limited or Conditional Protection

Many states protect only what is considered reasonable and necessary. This judgment can depend on:

• How much income you need
• Whether you have dependents
• Whether the annuity has a proper beneficiary
• When the annuity was purchased

Some states even put time limits on protection. If you bought an annuity right before filing bankruptcy or right before a lawsuit, the court may remove your protection. This prevents people from hiding money at the last second.

Other states require you to name certain beneficiaries. For example, a spouse or child. If your beneficiary is your estate instead of a person, the protection may not apply.

This level of protection works, but only under the right conditions. You must know your state rules to be sure.

States With Little or No Explicit Protection

Some states offer very weak protections for non-qualified annuities. In those places, your annuity may only be protected if:

• You use federal bankruptcy exemptions
• You place it inside a legally protected trust

This is why general advice is not enough. Asset protection depends on your state’s laws, not general rules.

Important Exceptions That Can Remove Protection

Even in the best states, there are limits. Annuities cannot protect your assets in every situation. The transcript covers several clear exceptions that people need to understand.

Here are the most common ones:

• Fraudulent transfers
• Child support and alimony
• Government claims such as the IRS
• Certain claims tied to beneficiaries

Let’s look at each one more closely.

Fraudulent Transfers

If you buy an annuity simply to hide money from a creditor, a court may cancel the protection. The purchase must be done in good faith.

Child Support and Alimony

Almost every state says annuity money can still be used to pay child support or spousal support. Divorce is expensive, and annuities cannot shield someone from these responsibilities.

IRS and Government Claims

State protection laws usually do not block the IRS. If you owe taxes, the government can still come after those funds.

Beneficiary Claims

If a creditor has a claim against your beneficiary, the protection may not continue after the money leaves the annuity. Who you name as your beneficiary matters.

How To Find Out What Your State Allows

If you want to know how much protection your state offers, there are a few easy places to look.

• Check your state statutes
• Read your state Department of Insurance website
• Look at consumer guides on annuities
• Review resources from the National Association of Insurance Commissioners (NAIC)

The NAIC often publishes charts that compare every state. These charts make it simple to see how your state treats annuities.

Key Takeaways About Asset Protection and Annuities

Here are the main ideas from the discussion.

• Annuities can protect your assets, but only based on state laws
• States like Florida and Texas offer the strongest protections
• Other states offer protection only under certain conditions
• Some states offer very little protection at all
• Exceptions like taxes, divorce, and fraud can override protections
• You should speak with an attorney if asset protection is your main goal

Annuities can be a smart part of an asset protection plan. But they are not perfect shields. It is important to work with people who know your state laws well.

Final Thoughts and Next Steps

If you want to explore how an annuity might protect your assets, or you want help choosing the best product for your situation, you can schedule a quick call with me. I’ll answer your questions and help you find the strongest options based on your state rules.

If you want a simple introduction to annuities, watch my video series, 20 Percent More Spendable Income in Retirement on atlasannuity.com.

And if you found this helpful and want more conversations like this, be sure to subscribe and share this information with someone who may benefit.

Ready to talk? Visit atlasannuity.com and book a short call. I look forward to helping you.