Estate valuation of annuity

[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.

[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.

[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?