Dad died owing back taxes and annuity with no beneficiary

[ninegeorge]

What is the name of your state (only U.S. law)? Georgia


Dad died owing the IRS back taxes. I recently discovered that his annuity had no beneficiary. Ive been told that the annuity should be paid into his estate and then paid to the IRS. While on the phone with the retirement company, I was also told that if I sent in a letter of instruction, they then would pay the beneficiaries that I named, rather than the estate. If I do this, will this circumvent the estate (IRS hands) and be treated as a regular death benefit and as though my dad had named beneficiaries himself originally?

Ive already received a death benefit that i was named as beneficiary, and I was hoping this annuity would pass to me outside of the estate also.

Any help is greatly appreciated.

 

[Dandy Don]

Normally the letter of instruction is done by the person who owns the annuity. Ask the annuity company if such a letter of instruction has been done before in the past for other clients in a similar situation as yours and see how they respond. If there is someone who had gotten a power of attorney from your father before he died, then the person who is POA would be the person with the authority to do the letter of instruction. If there is no POA then you will have to do the letter. Then ask the company send you a sample of how the letter of instruction should be worded. This would be a great way for you to receive the money without having to go through probate and you are not circumventing--you are receiving what is rightfully yours.

 

[Zigner]

If there is someone who had gotten a power of attorney from your father before he died, then the person who is POA would be the person with the authority to do the letter of instruction.

POA expires upon the death of the principal. There is no POA because the principal has died.

This would be a great way for you to receive the money without having to go through probate and you are not circumventing--you are receiving what is rightfully yours.

I disagree that this money is "rightfully" the OP's. This money goes to the estate and the estate has obligations.

 

[LdiJ]

POA expires upon the death of the principal. There is no POA because the principal has died.

I disagree that this money is "rightfully" the OP's. This money goes to the estate and the estate has obligations.

I agree with you. There is no beneficiary and the estate clearly has obligations. Who ever is the executor or administrator of the estate must distribute estate funds based on the law. The law says that the IRS and any other credits get paid before anyone inherits. The IRS knows that the annuity exists. They are not going to lay down and roll over.

 

[davew128]

In addition to the previous advice, I'd point out that the annuity distribution is INCOME to the estate. Depending on how the estate does or does not distribute its assets, the estate could have its own tax liability in addition to the IRS as a creditor on the decedents assets.