Daughter's Annuity claim after mothers death

[Denne]

I have a client that is to inherit her mother's annuity. It is not an IRA. She was told by her broker that the annuity can not be transferred into her name because it is not an IRA. He is telling her she can hold on to it in her mother's name and then take it as a death claim or do a 5 year deferral. I am really lost on this one. The broker suggested that the annuity be converted o a brokerage account and then pay the taxes on all interest earned in that annuity.

I am a bit unfamiliar with this product....it is called a Protective Life ProSaver guaranteed annuity. I really would like advise on the handling of this matter or at least letting her know if the broker is giving correct advise. Of course the broker stands to make more with a brokerage account fees most likely too..... The total amount of funds in this account are about $100,000.00 however it doesn't say how much or if all of that is in the annuity.

Thank you for your assistance.......

[Denne]

I did forget to add that the one year anniversary of her mothers death is just ahead and the broker now told her she must make a decision prior to February 25th.

[kcjenkins]

You need to see some paperwork on this. Does not sound like the broker is giving clear options, but if she inherited this, she should have the option to take the money into her own name, whether it is taxable or not.

[jlewis]

If the annuity is nonqualified, the attached article may give you some understanding or at least generate questions to ask.

Hope it helps.

Tax NQ Annuities.pdf

[Denne]

I just got additional information on this today. There was a revision.... She sent me something from her broker that said the cost basis of the annuity was $51,551.13 and the interest earned ws $37,291.35.....at 4.9% maturing 11/13/13. The interest is through the end of 2012. Wouldn't there be a penalty for taking the funds before the end of the maturity? I think she should know that before and too.....

Thanks for the most appreciated replies!