Do "all" annuities have penalties and tax ramifications if withdrawn early?
Posted by MarkSep 5
My deceased mother’s investment company wants to take my mother’s annuity and one other account, divide the total between our siblings and then put funds into annuities. I believe what they are doing is trying to keep it out of probate. However, if keeping it out of probate means that this free money will now be subject to penalties and taxes then I do not want to do this.
Do any of you understand what is happening here and if they put my mother’s money into four annuities for the four siblings, then are we subject to penalties and taxes if we withdraw the funds?
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Taxes are moot. If this is tax deferred money, you get to pay the tax when the money is distributed to you. This is true whether it goes through probate or not.
There shouldn’t be a tax penalty since you only get the money since mom died.
Someone will need to read the terms of the annuity to understand if there is a fee for closing it out prematurely.
in the first place, who is the executor of your mother’s estate?
the estate should decide how to distribute the money if your mother did not leave instructions for it
my annuity is specifically named as to beneficiaries, not leaving it up to one person who may or may not do as I want
probate sounds like this is a good amount of money