|Posted: February 27, 2006, 7:15 pm - IP Logged|
I think the beneficiary can still elect to take the remainder of the annuity as a lump sum at the time of death. In the case of a guaranteed annuity like Win For Life, the survivor would only receive payments for the duration of the guaranteed period, not the remainder of their life. The designation of a beneficiary bypasses the estate tax. Whether received as a lump sum or an annual payment, it'll be taxed as ordinary income.
There was a recent tax law that concerns the taxation of lottery winnings.