Trusts and annuities

Some Georgia residents might wonder whether their trusts should be named as the beneficiaries of the annuities they have as well as whether the annuities should pay into their trusts. There are some good reasons that people may want to have their annuities funded directly into their trusts.

For annuities, the annuitant is the life on which the annuity is based and the owner of the annuity is able to control what happens to the funds. An annuity’s beneficiary is the person who will receive the annuity once the annuitant dies. The beneficiary’s interest is a contingent one, and the beneficiary can be changed.

The primary reason to have the annuity pay into the trust is that it allows one party to control everything, helping things to go more smoothly. When a trust is not the owner of the annuity but is its beneficiary, the owner can change the beneficiary so that the funds from the annuity don’t go into the trust once the annuitant dies. This would leave the trust unfunded, circumventing the purpose of setting it up in the first place.

Keeping all of the various roles together under the control of a single party can help avoid some of the potential issues that could otherwise arise. People who have annuities and who want to set up trusts may want to talk with their estate planning attorneys about how best to accomplish their goals while also planning to fully fund their trusts. Trust planning may help people to pass their assets to their beneficiaries after they die in the manner in which they intend. Trusts may help people to avoid their families having to go through the probate process as well.

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Kevin Tharpe

With 25 years of experience, Kevin understands how estate planning, special needs planning, and government benefits programs work together. This is a crucial element of a thorough plan. He explains your eligibility for benefits programs and ensures that you do not make costly mistakes that may disqualify you or deplete your assets.
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