Wrongful Death Proceeds: Are they exempt from the Bankruptcy Trustee in Florida?
It really depends on how the distributions are made. If the proceeds are paid in one lump sum, then it is much harder to protect as opposed to periodic payments.
Although the proceeds may not be taxable, if the debtor receives them 6 months before or after the bankruptcy, they can still be captued by the Bankruptcy Trustee. However, Florida law provides an exemption for "annuity proceeds" which protect this property from the debtor's creditors and the bankruptcy trustee.
Many times, defendants (or their insurance carriers) in a lawsuit have to purchase annuities to pay off judgments because they cannot afford to pay lump sum payments. In that instance, the 11th Circuit Court of Appeals has said that these "periodic payments" in the form of annuities are protected.
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Greg Gilbert
Keith Maynard
