When a Client Inherits a Non-Qualified Annuity By: The Annuity Doctor

​When a Client Inherits a Non-Qualified Annuity, Most Advisors
Stop at the Settlement Letter. We Don't — Whether the
Beneficiary Is a Spouse or Not.

When a client inherits a non-qualified annuity, almost everyone assumes the settlement letter from the original
carrier is the only option — a lump sum, a five-year payout, or whatever terms happen to already be in place.
That's rarely the whole picture, and the right move depends on one thing: whether the beneficiary is the
surviving spouse or someone else. Both situations come with an option most people, and most advisors, never
hear about.

Non-Spouse Beneficiaries: The Stretch Most People Never Hear About
Under IRC Section 72(s), a non-spousal beneficiary of a non-qualified annuity can elect to stretch the death
benefit over their own life expectancy instead of being forced to take it within five years. Done correctly, this
keeps the money tax-deferred and compounding for years or decades longer, instead of triggering a large,
immediate tax bill on the gain. The catch: the election has to be made within one year of the owner's death, and
most carriers don't make this option obvious, don't offer it competitively, or don't offer it at all.
This is a piece of the business we specialize in. There are only a small handful of top-rated insurance companies
that offer non-qualified, non-spousal stretch contracts, and we work with all of them. We identify inherited nonqualified
annuities that qualify for the stretch and, where it benefits the client, execute a compliant post-death
1035 exchange into a contract from a carrier that actually supports the stretch — with stronger current rates than
the original company was offering. The client avoids the tax timebomb, keeps the money growing, and never
touches a check.

Surviving Spouses: The Option Most Spouses Never Hear About
A surviving spouse has the option of spousal continuation: stepping into the contract as the new owner, with no
forced distribution clock and full tax deferral intact. What almost nobody explains is what happens next — once
the spouse is the owner, they are free to shop that contract to a different carrier entirely through a standard 1035
exchange. They are not obligated to keep the original company's crediting rate, riders, or fees just because that's
who the money happens to sit with today.

Why This Matters Now
Many of these contracts were written years ago, at crediting rates or with rider terms that are no longer
competitive by today's standards. A spousal continuation followed by a proper review — and, when it makes
sense, an exchange to a stronger contract or even an accompanying stretch strategy for the eventual next
beneficiary — can mean a materially better outcome without giving up a single dollar of tax deferral.

Where We Come In
This is the piece of the business we specialize in, whichever situation it is. We review the contract, confirm which
option applies, and — only where it truly benefits the client — handle the exchange or continuation directly with
the carriers. We work alongside the client's attorney, planner, or trust company, not around them, and the client
comes right back to you for everything else. Think of us as your annuity department for this one specific situation.

Why This Matters to You
Most estate attorneys, fee-only planners, and trust companies don't want the commission-based annuity piece of
an inheritance — and for fee-only planners, you often can't touch it at all. That's fine. It's not where we compete
with you, and it's not where you want to spend your time. Whichever situation shows up — a non-spouse
beneficiary or a surviving spouse — we handle this one piece, keep you fully informed, and send the client
straight back to you for everything else. Think of us as your annuity department — the specialist you call the
moment either of these situations shows up.
We've built these partnerships with estate attorneys, fee-only planners, and trust companies for decades for one
reason: we stay in our lane, and we only recommend what's genuinely best for the client. That's what keeps the
referral — and the relationship — with you.
If a client has recently inherited an annuity — as a spouse or otherwise — or you'd just like a second opinion on a
settlement offer before they sign anything, reach out. There's no cost to you or your client to ask the question.
P.S. If you have any annuity questions at all, or an existing client contract you'd like us to take a look at, just give us a call
anytime.

How a referral works
1. You flag the situation — a client has inherited, or is about to inherit, a non-qualified annuity,
whether as a spouse or not.
2. We review the contract and payout options at no cost, and tell you plainly which option applies and
whether there's an opportunity.
3. If there is, we handle the paperwork and carrier coordination directly. The client's relationship --
and yours — stays exactly where it is.

Who we are
Curt Zacharias Sr. & Curt Zacharias Jr. — a father-son team based in Dunlap, Tennessee. Curt Sr. has 38 years in the
annuity business; Curt Jr. has 10. Curt Jr. lives in Dunlap with his wife and four children on a small homestead;
Curt Sr., also of Dunlap, lives with his wife of 51 years and has nine grandchildren. Annuities and safe-money
strategies are the only thing we do, which is why attorneys, fee-only planners, and trust companies have trusted
us with this piece of their clients' planning for decades.
The Annuity Doctor — a referral partnership built on one rule: we only recommend what's best for your client.
Curt Zacharias Sr. & Curt Zacharias Jr. • Dunlap, Tennessee • [email protected] • (520) 990-0009 •
Licensed nationwide