The following Wills & Probate practice note provides comprehensive and up to date legal information covering:
An annuity is a sum of money payable periodically, out of personal estate. Savery v Dyer (1752) Amb 139 (not reported by LexisNexis®). It is personalty Parsons v Parsons. An annuity is a legacy and a bequest of such a capital sum as may be necessary to produce the amount of the annuity.
Annuities are sometimes useful if a drip-feed approach is required. They are essentially, legacies payable by instalments for the lifetime of a beneficiary.
The Will should provide if:
the executors have the power to purchase the annuity from the estate's capital assets
the executors set aside a sum from income to fund the purchase of the annuity
the executors set aside a sum from both capital and income to fund the purchase of the annuity
the annuity is purchased during the executors' lifetimes, if they have the funds to do so, the deferred annuity being vested in trustees on death
Depending on the method chosen, there will be differing tax considerations, both capital and income.
Annuities may be created:
inter vivos by deed
by or under statutory powers
An annuity given by Will is a legacy of money payable by instalments, each of which is a separate legacy or a series of legacies payable at intervals.
An annuity given by Will may be classified as:
a specific annuity (a gift of
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