If you inherit a non-qualified annuity, then before you decide what to do it is important to understand the different options and tax implications.
Annuities have become an extremely popular tool in people's retirement plans. Like any other asset, these contracts can be the subject of an inheritance.
If they are inherited then the beneficiary needs to know what the options are for handling the annuity and what the tax consequences are. First, if a spouse inherits the annuity, then he or she can almost always continue the annuity contract as it is and thus face no immediate tax issues.
As the Motley Fool discussed in an article entitled "Tax Rules for an Inherited Non-Qualified Annuity," non-spouse heirs typically have three options, including:
If you inherit a non-qualified annuity and have questions about what to do with it, talk to an estate attorney about these options and which is the best choice for you.
Reference: Motley Fool (Dec. 19, 2015) "Tax Rules for an Inherited Non-Qualified Annuity"
© 2020 Legacy Law Center