Search:

Would you like to contribute to this site? Annuity Menu Submit an Article Submit a Tip Place your Ad Add URL Annuity Questions? Contact Us  Annuity Types   Compare Annuities   Fixed Annuity   Immediate Annuity   Annuity Calculator   Annuity Quote   Purchasing Annuities   Selling Your Annuity   Annuity Payment   Annuity Equity Indexed   Annuity Products   Annuity Companies   Annuity Services   Annuity Taxes   Annuity Information   Annuities   Financial Planning   Retirement

Return To Annuity Article Archive   Search the Article Archives Avoid Annuity Tax Problems By Tony Novak Millions of investors own retirement annuity accounts but few are aware of the tax implications when the annuity is passed to an heir or beneficiary. A little known tax fact is that income tax on an individually owned annuity can be postponed only if the account owners spouse is named as the sole beneficiary. If the annuitant is not married, the same treatment may be obtained through the use of a trust account. Any other designation of the account beneficiary will cause the proceeds to be immediately taxable in the year of the account owners death. The results can be financially devastating, triggering huge current tax liabilities that would have otherwise been avoided. Most beneficiary designations are made at the time that the annuity account is opened, often without the advise of a professional tax adviser. The investment representatives who typically open these annuity accounts give the blanket recommendation to investors to 'seek advise from your own tax adviser' but few investors ever bother to seek separate tax advice. Investors often assume that the financial planner opening the annuity account is incorporating tax advice into the service provided, but usually this is not the case. By the time the tax problem is discovered by the executor or the estate, it is too late to make any correction. About the Author: Tony Novak is an independent writer and financial adviser in Narberth PA who provides OnlineAdviser services through MedSave.com and FreedomBenefits.org Annuity Beneficiary

Get your Annuity questions answered... Subscribe to our Annuity Newsletter FREE! Your First Name: Your Email Address: Do you have an ezine? List your ezine in our Free Newsletter Directory!

 

Home  |   Ask the Annuity Expert  |   Annuity Archive  |   Annuity RSS Feeds  |   Advertise  |   Sitemap