Inheriting an annuity comes with a deadline that's easy to miss. Your contract typically offers multiple payout options, including a choice that stretches distributions across your lifetime. The window to elect that option stays open for only one year. The wrong election or a delayed decision compresses your inheritance and tax bill into far fewer years.
Nonqualified annuities purchased outside an IRA or employer plan follow Section 72(s) of the Internal Revenue Code, not the SECURE Act's inherited IRA rules.1 That means you don't automatically get a 10-year withdrawal window. Instead, federal law creates two potential paths for distributing the contract.
Payout Path
General Timeline
Main Requirement

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