Annuity Tax Reduction Plan
The annuity tax reduction plan is an estate planning technique for transferring the value in a deferred annuity into a more efficient tax arrangement. The annuity tax reduction plan can be an effective way to minimize estate and income taxes associated with owning an unneeded annuity, and maximize the amount of wealth transferred to subsequent generations. This generally eliminates taxes that are due on the death of the annuity holder. Annuities are usually taxed based on the income tax brackets of the beneficiary. The preceding summary is intended to be a general discussion of the topic presented, and is based on our current understanding of applicable tax laws, regulations and rulings. In actual practice, the transaction discussed may be more complex and will require the attention and expertise of professional advisors. In no way should this summary be construed to constitute tax or legal advice.