Jack and Lisa bought annuities to provide for their retirement. The annuity investments
were doing exactly what the couple had hoped to accomplish: provide a steady and
reliable source of income through periodic annuity payments. But Now Jack and Lisa
had other concerns. Both of their children were married and had started families
on their own. Jack and Lisa were blessed with five grandchildren. Transferring some
of their wealth out of annuities became a source of concern to Jack.
He had heard that his son and daughter, who were to share equally in their estate,
might face unfavorable tax consequences as beneficiaries of his and Lisa's annuities.
Specifically, if his children chose to receive a lump sum payment from the annuities,
they could owe ordinary income taxes on any gains in the original annuity contracts,
undermining the total amount of capital that Jack and Lisa could transfer to their
children.
Alternatively, Jack and Lisa thought that the monthly annuity payments his son and
daughter stood to receive, while helpful, were probably not the best way to pass
on wealth and would just spread out the income tax implications over the course
of many years.
Far better, Jack thought, than transferring annuities would be to transfer stocks
or mutual funds, for which his heirs would experience the potential benefit of a
step up in value, eliminating the tax on any gains up to that point. If their children
maintained the original investments, they could also defer any future capital gains
until such time as they might need the cash. With the grandkids still in diapers,
this meant the money Jack and Lisa transferred to their children could possibly
grow tax deferred for another 20 years.
Jack became convinced that a little planning on his part now could have a dramatic
impact on his children and grandchildren several years from now. Jack and Lisa's
financial advisor heard the couple's concerns and agreed an annuity cash out had
merit. He said they were fortunate because they had other investments to provide
income.
With that Jack made his decision... Now he needed liquidity through annuity buyouts.
That's when he called J.G. Wentworth.
Contact JG Wentworth's annuities specialists to convert your annuity to cash now.
