Are Annuities Protected From Creditors?

annuity educationWhen financial hardship hits, creditors find themselves in danger of losing their assets.  So the question arises, are annuities protected from creditors?  The answer depends on which state you reside.  Depending on your state, the answer can be completely protected, partially protected, and not protected at all.  An article written by Eric Feigenbaum of Demand Media cited “Some states make annuities unconditionally sheltered from creditors. These include Michigan, Minnesota, New Mexico, Oklahoma Texas and Wisconsin. California protects unmatured policies. Iowa also protects policies provided policyholders don’t purposely overpay during the year prior to bankruptcy while Louisiana has a similar rule protecting annuities provided they are not opened within nine months of bankruptcy. North Carolina and Rhode Island protect individual retirement annuities and Wisconsin protects them provided they are for retirement, disability or death, among other factors.  


A few states including Georgia, Missouri, Mississippi, New York and Utah protect annuities to a “reasonable extent” — meaning enough to sustain a person despite bankruptcy. This vague definition leaves it to bankruptcy courts to apply in each individual case. Annuity holders should expect to persuade a judge to protect their annuity money.  Creditors going after assets in Colorado, Massachusetts, Montana, New Hampshire, Virginia and West Virginia are likely to succeed. State laws do not exempt annuities from collections in any way.”


If you are questioning whether or not your annuity is protected from creditors, the first thing you should do is contact a retirement specialist in your area that can help guide and educate you.



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The articles displayed in are for educational purposes only. This website of course does not know you, so do not rely on it for making final decisions for your insurance, investment, or tax needs. Always be sure to seek out personalized guidance from a licensed advisor/agent in your state for your insurance, investment, or tax planning needs.

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