Annuities & Life Insurance


Annuities are assets that may or may not need to be placed in Trust because the proceeds transfer contractually to the named beneficiary and, therefore, already avoid probate. However, if you wish the proceeds to be distributed in the same manner as the other trust assets (which is usually the case, especially for example if you want them released slowly over certain ages, etc.), then the Trust should be the owner of the annuities. Alternatively, you could name the trust as the beneficiary of the annuity, but one limitation is that your trustee won’t have access to such assets until post-death once they’re actually distributed to the trust and within the trustees’ power. You must instruct each insurance company or your insurance agent to designate your Trust as the owner or beneficiary, as the case may be. However, stretch-out opportunities regarding continued tax-deferral may be limited if the benefits are paid to a trust rather than to named individuals, so you may want to discuss with your financial advisor for the best solution to your situation. For that reason, sometimes people intentionally keep their annuities out of their living trust so that their living trust is neither the owner nor the beneficiary. In that case, sometimes annuity companies have their own “control from the grave options” and “stretch-out” provisions that may be helpful from a control and/or taxation standpoint.

Mike Massey Law can help you with your Last Will & Testament, Living Trust, Durable Power of Attorney, Medical Power of Attorney, Living Will, HIPPA Release, Transfer on Death Deed, Cremation/Burial Wishes, Pre-Need Guardianship, Guardianship preference for Minor Children. Local Texas Attorney/Lawyer may be able to help you with estate planning. Call 512-757-9065 or Email: mike@atxwills.com



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