What to do as a beneficiary of this financial vehicle ?

[hogtied]

Three years ago my father invested $200K into an IRA annuity with MetLife that is paying a fixed 5.3%. I am listed as the beneficiary. My Dad does not need this money nor will he need it in the future. He is not likely to annuitize it. He invested in this vehicle to protect the money due to my mom going into a nursing home. My mom has since died. I believe the money would be protected also if my Dad ever needed nursing care.

My Dad would be very willing to here advice as to what to do with this investment vehicle now. I'm looking to the board for help with this. What are our options and the boards recommendations? Dad is 78 and in good health. Thanks.

[brewer12345]

Consult an estate planning attorney. Your primary issues at this point are estate tax related, so get advice. IIRC, annuities get very poor tax treatment as part f an estate, so it may pay to cash it in and invest the proceeds in a taxable investment.

[FinanceDude]

Quote:

Originally Posted by brewer12345 Consult an estate planning attorney. Your primary issues at this point are estate tax related, so get advice. IIRC, annuities get very poor tax treatment as part f an estate, so it may pay to cash it in and invest the proceeds in a taxable investment.

Good advice. However, as it is in an IRA, you would not be subject to sell it out for huge tax consequences. If you dad passes on, you would get the money, and be able to keep it tax-deferred, other than an annual RMD on your life expectancy every year.

Depending on how long ago he bought it, there may be a significant surrender charge to switch things to something else.

As far as brewer is saying, even though the money goes to a beneficiary, it may be included as part of the overall estate for state estate tax purposes, etc. So consult with an estate attorney before going much further. The time to act is BEFORE he becomes incapacitated and you have to "guess" as what he would have wanted.............