Q. How can I know the amount of my payments?
A. Your payments are based on:
1) The annuitant(s) age;
2) The selling price of the property minus any mortgages, fees or commissions that must be paid off;
3) The length of deferral, if any, until payments begin.
A payment scenario will be provided by asking for your FREE illustration.
Q. What happens if I live longer or less than life expectancy?
A. Your annuity payments go on until you (or the surviving spouse) die, no matter whether that is sooner or
later than life expectancy. Life expectancy is just the number used to calculate the size of the payments.
After your death (or the surviving spouse's) the annuity becomes null and void.
Q. Are there any flexibilities or variability's in the annuity payment stream, such as increasing the
payments over time?
A. The trust may issue more than one annuity contract to the annuitant at the outset. One would be immediate
and the other (or multiples) would be deferred.
Q. Can I cancel the whole deal after a few years and get my money?
A. If the trustee agrees, you may terminate the trust and get the cash out. However, you would owe all the
taxes, plus penalty and interest, on the full amount of cash you received.
Q. What happens if capital gains tax rates are lowered after I set up the private annuity?
A. Politicians frequently advocate lowering capital gains rates, so this could happen. In that case, you would
get the benefit of the lowered rate on the capital gains portion of your annuity payments.
Q. Can the trust buy property at a later date?
A. Yes, the investments of the trust are extremely flexible. The main focus of the trust is to be able to make
payments as agreed to by the annuitants. The annuitant can even borrow from the trust.
Q. What happens if the trust goes broke before I die?
A. With bad luck or poor investment that could happen. In that case there are no further taxes, nor penalty or
interest owed by either the trust or the annuitant to the IRS. You cannot be taxed on money you don't have
or will not earn.
Q. When the property is sold, may I keep some of the cash from the sale?
A. Yes, in that case you would pay taxes only on the portion of money that you kept for yourself.
Q. How can I have my tax advisor or attorney analyze the private annuity idea?
A. We will gladly provide your tax advisor with the technical and legal information he/she needs to properly advise
you. For a quick answer have your tax advisor review IRS Revenue Rulings 55-119 and 69-74, plus the IRS'
GCM39503 of 5/19/86 and Treasury Decision TD-8754 issued in 1998, and the Ninth Circuit U.S. Court of
Appeals decision "LaFargue v. Commissioner, 689 F. 2d 845 (1982)".
Q. I'm interested in having one of these plans put together, what should I do next?
A. Your next step is to contact us directly. We will communicate with your tax advisors if necessary. We will also
provide an illustration of your annuity payments. To get the program put together we will help you fill out an
application. Then our attorneys, who are experts with the private annuity, will review the information and put the
documentation together. We will then assist you with the implementation of your trust.