Legal Question in Wills and Trusts in Texas

Inherited Annuity
My grandfather recently passed and we discovered that he had an annuity worth 400 thousand dollars where he named me as the beneficiary. I want to share this annuity with the family (his son and my 3 siblings - split 5 ways).

Here is my problem. I'm thinking that if I cash in the annuity, I will have to pay a 10% penalty to the IRS; taking 400K in one year will put me in the 35% tax bracket for the year (I normally quite modestly on military retirement income); and I will have pay about 30% in gift taxes for giving away over 10K per relative in the year. I probably will also have to pay some type of fee or penalty to the company.

Is there a way that when the annuity is transferred to me that I can put all of my family members on the annuity? That way, I could keep my 1/5th and take monthly distributions and the other family members could do whatever they want with their 1/5th: cash it in, take distributions, etc..

Asked on 11/18/07, 11:25 pm

James Grissom Law Office of James P. Grissom

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Re: Inherited Annuity

You can file an agreement in the probate court which can then be presented to the annuity company.

Answered on 11/19/07, 8:34 am

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