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Estate valuation of annuity


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Guest Jeff

Husband purchases a joint & survivor annuity (not an employer plan). Wife dies 5 months after he does. There are no other beneficiaries. Q: Does the annuity become "worthless" upon wife's death, and therefore, value of zero is reported on her estate tax return?

Any assistance is appreciated.

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Guest Noel C Ice

Assuming that there is no term certain, I assume that the answer is "yes."

Also, there should have been a marital deduction in H's estate, because this is a "deductible" terminable interest.

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Guest Jeff

Thanks, Noel. I have a follow-up question: May the husband's estate use the alternate valuation date and therefore report an annuity value of zero on his estate return since it is basically worthless before the 6 month period has expired. Or must is estate use the value as of his date of death?

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