Bene on Annuity Can't be Changed!

[JessiesGirl]

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

I am the recipient of an annuity that pays out monthly for the next 32 years or so. If I die, the payment goes to my estate, which is not what I want.

Late last year, my husband and I took advantage of the falling housing prices and sold a bulk payment and part of my monthly payments (with a judge's approval) to another annuity company. We purchased a repo'd house with that money. The monthly repayments are $250/month for 10 years. This was approved and I got my money in January 2009, so I have more than 9 years to pay back. The payment is automatically deducted and then remitted to the new company each month so I do not have to "pay" - it is done for me.

My husband and I recently formed (is that the right word?) a trust. Our checking account and house are now in this trust, as well as my life insurance. Our vehicles are not worth anything so they are not included, but my annuity is.

The problem is that originally, when I set up the annuity (medmal settlement), I was not married to my current husband, and the beneficiaries were my 2 sons, equally. My estate is secondary beneficiary.

Now we have this trust set up, and we sent a CRRR letter to my annuity company requesting to put the annuity into the trust. They responded no, because I "owe" my annuity company more than 9 years of payments, and until that "debt" is satisfied they cannot change my beneficiary. Remember, they pay me money every month and it is a guaranteed payment to me, so I don't understand how I "owe" them.

My question is: why can't I change the beneficiary to the trust if I "owe" on my annuity, which is the same annuity company that pays me for the next 32 years? The way I see it, they owe me.

Extremely baffled, but that is probably because of the stroke I endured from the medmal issue. The annuity company just says that's the way it is, goodbye and have a nice day....

I realize they are probably legal in doing this but why?

Thank you,

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

 

[Dandy Don]

Was the company that bought your annuity actually an annuity company in fact or are they a company that buys out annuities and life insurance policies before they mature just so you can get cash, normally much less than the full value of the annuity at maturity?

 

[JessiesGirl]

The company that purchased the payments (the bulk payment and part of my monthly payments) is one that purchases payments from lawsuit or lottery winners (I'll call them Company #2), and my annuity company (I'll call them my annuity company) is the company that I receive my monthly payment from each month, less the $250 my annuity company subtracts automatically and sends to Company #2 for me.

Novation and PeachTree and the others you see on TV (Think of that older gentleman on the ads for JG Wentworth, for example) are all payout companies, designed to purchase annuities from lawsuit winners and lottery winners and the like. The amount they purchase payments for is of course a lot less than what you'd get if you just stayed put, but their ad appeals to people's lack of patience to get "YOUR money NOW!!", as though the money the annuity was set up in is being unjustly held back from them. That's why Novation and the others are so profitable: impatience of people just like me. My husband and I were also VERY worried about the economy and last year when we were listening to the news about banks failing, my husband said I should check out if my annuity company was in danger. I then called my medmal lawyers who said that was a good question but that it was one (obviously) that they wouldn't have an answer to.

Yeah, we took a hit on the payments (not as much though than if we were to try to do that same deal today). I receive monthly letters (from several companies) asking me to cash out the rest of my payments. I called last month and one of them said I'd probably net roughly 25% if I cashed in two of my other bulk payments, and actally discouraged me from cashing them in, for which I was glad. This company was aboveboard and we felt they were honest and straightforward about everything and would recommend them to any who needed them.

I am not at liberty to discuss any of the actual amounts or names of companies, etc., I guess because of the privacy clause in my contract with the lawyers. I wish I knew if I had gotten a good deal but in my heart I believe I did. It's just that I am now asking why I cannot put my annuity into the trust until the payments to Company #2 are paid off. My husband's family is working on it (there is a family member that has a call into the lawyers that handled our trust and is awaiting their reply). I am impatient I guess and want to know now.

If you know why, other than "because they said so", I'd sure like to know.

Thank you,

Kathy