Issue: Whether A ‘Variable Annuity Contract’ Is Considered an Annuity Contract, Under New Jersey Law.
| Area of Law: | Business Organizations & Contracts |
| Keywords: | Variable annuity contract; Annuity contract |
| Jurisdiction: | New Jersey |
| Cited Cases: | 103 A.2d 153; 216 A.2d 258; 24 A.2d 809; 90 N.J. Super. 91; 11 N.J. 64; 14 N.J. 497 |
| Cited Statutes: | N.J.S.A. 17B:24-7; N.J.S.A. 17B:17-5; |
| Date: | 06/01/2001 |
The relevant New Jersey exemption statute provides that “an annuity contract . . . shall not be subject to execution, garnishment, attachment, sequestration or other legal process.” N.J.S.A. 17B:24-7 TA l "N.J.S.A. 17B:24-7" s "N.J.S.A. 17B:24-7" c 2 (West 1995). Thus, the New Jersey statute requires that the investment vehicle be an “annuity contract” before any exemption applies. The New Jersey exemption statute, contains no definition of “annuity” or “annuity contract.” However, by reference to other New Jersey statutes and case authority, a clear definition may be found.
“‘Annuity’ is a contract . . . under which the insurer obligates itself to make periodic payments for a specified period of time . . . .” N.J.S.A. 17B:17-5 TA l "N.J.S.A. 17B:17-5" s "N.J.S.A. 17B:17-5" c 2 (emphasis added). The payments are of a “specified sum of money at stated intervals usually annually or at aliquot parts of a year.” Lichter v. Trust Co., 11 N.J. 64, 75 (1952) TA l "Lichter v. Trust Co., 11 N.J. 64 (1952)" s "Lichter v. Trust Co., 11 N.J. 64, 75 (1952)" c 1 (emphasis added). An annuity is “directed to be paid absolutely and usually without contingency.” Commercial Trust Co., 131 N.J. Eq. at 233, 24 A.2d at 814 TA s "Commercial Trust Co. v. Kohl, 131 N.J. Eq. 233, 24 A.2d 809 (Ch. 1942)" (emphasis added). The payments are “not income or profits, nor indeterminate in amount varying according to the income or profits.” In re Estate of Birkner, 90 N.J. […]