Annuities, What Seniors Need to Know

8 Annuities and Estate Planning Estate planning helps you make sure your wishes will be followed when you die or can no longer manage your affairs. Talk to an experienced estate-planning attorney. If your estate-planning documents are not properly prepared and completed, they may not hold up in court. This can cause lasting damage to you and your family. An annuity can be part of an estate. However, before you buy an annuity you should discuss it with your attorney and make sure it fits into your overall plan. You can choose a beneficiary. A beneficiary, also called a survivor, can get income payments after you die. This person is usually your spouse. There are several ways to get income. • Life Annuity: You get an income for life. When you die, payments will stop. • Period Certain Annuity: You get an income for life. After you die, your survivor gets an income for a limited time. • Life Annuity with Period Certain: You get an income for life. If you die before you reach a specific age, your survivor gets an income for a limited time. • Joint and Survivor Annuity: You get an income for life. After you die, your survivor gets a portion of that income (50% or 75%, for example) for life. Charitable Gift Annuities A charitable gift annuity is a contract between you and a charity (instead of an insurance company). You give money or property to the charity, and you get a tax deduction. The charity agrees to pay income to you and your beneficiary for your lifetimes. The annuity is backed by the charity’s total assets. • Before you buy a charitable gift annuity, talk to a trusted financial advisor and the Department of Insurance. • Make sure the charity has a Certificate of Authority from the Department of Insurance.