How to get details of annuity
July 9, 2015 8:38 AM   Subscribe

Annuity company told me I'm a beneficiary and will get $X. Sent me half that. Now what?

A relative died and I got a surprise call from a financial company saying I was named as a beneficiary on an annuity. This is a real company like Edward Jones. Guy said I was one of a few beneficiaries and my share was $X (five figures). His company sends me the forms. He talks about some investment options but also says a lump sum is an option. He walks me through the form and I check lump sum and send it in. Couple weeks later I get a check but it's for about half of $X. Also the guy told me the amount of taxable interest I would be taxed for and the taxable amount shown on the stub of the check is way less (like not even 1/10 what he said). There's nothing about withholding and I checked the box for no withholding. Now I can't reach the guy on the phone. I haven't cashed it yet.

What do I do? Is there a way I can find out the full annuity info or something? Maybe half $X is the right amount but I don't know why he would say the bigger amount.
posted by anonymous to Work & Money (6 answers total)
 
Did the company at any point describe to you what the payouts would be? If you could describe the "investment options" that were offered that would be helpful, as it's unclear whether you were being offered a longer installment payment vs lump sum. Typically annuities die with with the beneficiary, but it's unclear what happened here.

At some point a big part of your decision should have revolved around the information of: "Option A will pay $X a year for the next Y years; or we can pay you a lump sum of $Z now."

Don't cash just yet, review the forms and any associated disclosures more carefully to see if there's any discussion of the payout terms, and continue to try to get in touch, potentially by certified letter.
posted by Karaage at 9:02 AM on July 9, 2015


Do you know the executor of the will for the relative ? It seems odd that the financial company is who'd be talking to you, and not the lawyer or executor. (Though this may be the way the annuities are handled vs other estate assets).

(US assumption) : You don't want a surprise come tax time with a 1099 form. For most assets, you inherit at the stepped up basis at time of death, but I don't know about annuities and how they are handled. So you definitely want to get answers for this.

I'd have to guess that the person you spoke with was interested in selling you more product, and hoping you'd roll the money back in with them. Once cashed out, they don't see any more business in you (and may not have much duty to answer you - they send you the check and proper forms and say "talk to your tax adviser".. )
posted by k5.user at 9:06 AM on July 9, 2015


A US state lottery is a common example of a "lump sum vs annuity" option where the general rule of thumb is "lump sum after taxes is less than half the jackpot." Just going off of that I suspect you aren't being shafted but try calling the person from a different phone number and if necessary leave a voice mail expressing concerns that you're not dealing directly with the executor of the will and you need to know what fiduciary responsibility this finance person has and to whom. That part seems odd.
posted by aydeejones at 10:11 AM on July 9, 2015


I'm not sure from your post if "Edward Jones" is the annuity company, or a broker, or perhaps they are the same. In any case, I would make a call to the annuity company's public number, and ask for an explanation. If the guy you talked to works for that company, as to speak to someone else.

It's possible some money was held back for withholding tax. It shouldn't be as much as 50% though. Also, it's possible you were misinformed about the amount in the first call.
posted by SemiSalt at 10:13 AM on July 9, 2015


Do you know the executor of the will for the relative ? It seems odd that the financial company is who'd be talking to you, and not the lawyer or executor. (Though this may be the way the annuities are handled vs other estate assets).

The OP was named as a direct beneficiary of the annuity, not the estate. Therefore, it's not an estate asset. It passes outside any estate proceedings, has nothing to do with any estate proceedings and there is no reason for the executor of any will to be involved.
posted by Lucinda at 10:15 AM on July 9, 2015 [3 favorites]


It's half of "x" because you requested the lump sum. The annuity would have paid out "x" over several years or the lump sum is "y" =~ x/2.
posted by saradarlin at 12:00 PM on July 9, 2015 [5 favorites]


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