How to Transfer Ownership of an Annuity

Save

Annuities supplement retirement income by deferring taxes on earning and adding distributions to gross income. There are four designated parties to any annuity contract: the annuitant, the owner, the insurance company and the beneficiary. The insurance company is the seller of the annuity and promises to pay lifetime and death benefits. Beneficiaries receive death benefits. The owner and annuitant are often confused. The owner is the person buying the annuity to pay benefits on the annuitant's life. The owner is responsible for tax considerations while payments are based on the age and date of death of the annuitant. Annuity owners can be changed.

Things You'll Need

  • Annuity contract
  • Pick a new owner. Options include a spouse, child or even a charity. Get the new owner's legal name, date of birth and Social Security number.

  • Call the insurance company at the customer service number located on the annuity contract. Request an "Annuity Change of Ownership Form," or a similarly titled form.

  • Fill out the form with the original owner's information, being careful to not have any typos, use the full legal name and double check contract and Social Security numbers to make sure nothing was transposed. Fill out the new owner's information.

  • Sign and submit the form.

Tips & Warnings

  • Consult a tax professional regarding the ownership change. The existing owner may have to pay taxes for gifting an annuity over the annual gift allotment or for selling the annuity.
  • Changing the owner to a charity can reduce the amount of taxes owed in the estate. When donating the annuity to a charity, the annuitant retains living benefits, gets a tax deduction for the donation and the charity often becomes the beneficiary as well, receiving the death benefits.
  • You can not change the annuitant on the contract, thus the living and death benefits are still based on the annuitant's life.

References

Promoted By Zergnet

Comments

You May Also Like

  • Annuitant Vs. Owner

    Annuity contracts have four parties to the contract, two of which are often confused: the owner, the annuitant, the insurance company and...

  • Does a Beneficiary Pay Inheritance Tax on an Annuity?

    If you inherit an annuity, you may be liable for inheritance taxes, as well as estate and income tax.

  • How to Transfer a Non-Qualified Annuity

    The rules for transferring a non-qualified annuity are much the same as for transferring a qualified contract. There is just less paperwork...

  • How to Change the Owner of an Annuity

    There are four entities associated with an annuity contract: the insurance company, the owner, the annuitant and the beneficiary. The owner and...

  • How to Transfer an Annuity

    Annuities are tax-deferred investments used for supplemental retirement plans. Annuity funds can be qualified (IRA, 401k) or non-qualified. The only difference between...

  • How to Donate an Annuity

    A deferred annuity is an insurance investment used to give the annuitant, or person with the annuity, a supplemental retirement income source....

  • How to Donate a Variable Annuity

    A variable annuity is a tax-deferred investment structure sold by insurance companies to consumers looking for long-term growth to later supplement retirement...

  • Can an Annuity Have Two Owners?

    Annuity contracts can have two owners, and many financial advisers recommend that married couples convert savings into joint annuities that provide a...

  • Annuity and Divorce

    Splitting assets in a divorce is often complicated with many factors determining who gets what. When it comes to tax-deferred annuities, the...

  • What Are the Benefits of an Annuity in Medicaid?

    Annuities are private insurance contracts that guarantee an income to the insured. The insured deposits a lump sum of money, over time...

Related Searches

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!