Can Annuities Be Inherited? (Wilmington, DE)

After the death of a loved one, thinking about finances and legal contracts can be overwhelming. However, it’s important to understand that annuity contract terms often continue even after the annuitant's death.

✅ Can Annuities Be Inherited?

Yes—annuities can be and typically are inherited by designated beneficiaries. The payout terms generally continue in the same manner as before the original annuitant passed away.

💍 Spousal Continuation

If the beneficiary is a spouse, they usually have more control over adjusting the annuity terms. This may include converting the annuity into their own or altering payout options.

💰 Taxes on Inherited Annuities

The amount of tax you owe on an inherited annuity depends on:

The payout structure (e.g., lump sum, periodic payments)

The beneficiary’s relationship to the deceased

➡️ Lump sum payouts are taxed immediately and often come with higher tax consequences.

👶 Inherited Annuities for Minors

If the beneficiary is a minor, they cannot access the annuity until they turn 18. A legal guardian may be required to manage the funds in the meantime.

💡 Why This Matters

Understanding how inherited annuities work can significantly reduce both emotional stress and financial uncertainty during a difficult time.

📞 Talk to us, a Trusted Financial Partner

Before making any final decisions about an inherited annuity, it’s schedule a meeting with us to discuss your options! https://www.smarttaxfreeretirement.com/schedule