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Inherited Annunity

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  • Avatar Golfer68 
    Participant
    Status: Physician
    Posts: 69
    Joined: 02/08/2017

    I just inherited an annuity from my grandma.  I believe the contributions were made pretax.  Am I right that my two options are:

    1) take as a lump sum and pay income tax on full amount

    2) Roll over into an inherited IRA and begin to take RMDs next year

    There are no other reasonable options correct?

    #234072 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016

    You cannot r/o an inherited annuity from your grandma into an inherited IRA. You are required to distribute the balance over a period of 5 or fewer years. You may have the ability to stretch payments out over your lifetime but I’m not sure if that’s available to “qualified” (pre-tax) annuities.

    We don’t deal with annuities much – maybe one of the insurance guys can confirm the accuracy of my last statement.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #234086 Reply
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    Avatar Golfer68 
    Participant
    Status: Physician
    Posts: 69
    Joined: 02/08/2017

    Sorry, she did not inherit it, it was hers originally … I am inheriting it

    #234123 Reply
    Faithful Steward Faithful Steward 
    Participant
    Status: Financial Advisor, Small Business Owner
    Posts: 509
    Joined: 06/12/2017

    First, are you sure the annuity was held inside an IRA? Or, could it possibly be a non-qualified annuity? You never made this clear in your original post.

    Michael Peterson, CFP® | Faithful Steward Wealth Advisors
    https://ProsperousPhysician.com | (717) 496-0900

    #234167 Reply

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