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Purchaser, Others as Owner
In most cases the purchaser of the contract names himself or herself as owner. However, sometimes the purchaser names another party, such as a trust, as owner. For example, trust ownership may be used when the purchaser wishes to make a gift to a minor. Certain forms of trust ownership may shift income and estate taxation of the benefits of the contract away from the purchaser. However, the purchaser may be liable for gift taxes on the value of the annuity and/or the premiums paid on it.

In any case, by giving up ownership of the contract, the purchaser also gives up all contractual rights to control the annuity. A purchaser could name a trust as owner and still retain control over the trust, but such a trust would not shift income or estate tax away from the purchaser. Purchasers should consult tax and legal counsel before giving ownership of an annuity to anyone other than himself or herself.

Last Updated: 9/23/2012 10:05:00 PM