Does this sound like a scam?

[Mmathis]

One of the reasons I asked if it was a life insurance policy or an annuity was because their may be different tax responsibilities depending how the estate was set up.

How so? Maybe I should hold out a little extra for Uncle Sam?

 

[dieselplower]

It's been a while since i have been in the financial advisor business but generally life insurance policies are paid out tax free but an annuity will be taxed on the gains of the policy. Annuities and life insurance policies are often sold by the same company. I was wondering if it was an annuity before because you had mentioned how your mom had passed long ago but the check was not issued for several years. Annuities often have fixed periods for terms like 5 to 10 years. Im really not an expert on taxes nor was I ever so you may want to a a little asking around just to be sure you dont find yourself unexpectedly owing money come tax time.

 

[Bullfrog]

The IRS garnished my income tax for a student loan my wife made long before I met her. For months after the payment was made, we kept getting calls from an "attorney's" office saying the loan was due and that they were willing to accept a partial payment. They asked for my social and I told them they were a scam, that they were listed as so on the internet.

Just beware and don't release any private info.

 

[Mmathis]

It's been a while since i have been in the financial advisor business but generally life insurance policies are paid out tax free but an annuity will be taxed on the gains of the policy. Annuities and life insurance policies are often sold by the same company. I was wondering if it was an annuity before because you had mentioned how your mom had passed long ago but the check was not issued for several years. Annuities often have fixed periods for terms like 5 to 10 years. Im really not an expert on taxes nor was I ever so you may want to a a little asking around just to be sure you dont find yourself unexpectedly owing money come tax time.

OK, thanks, that does make sense, and yes, the original check would have been sent 10 years after Mom died (2002-2012). It's not a lot, but we'll put a little aside for income tax time.

 

[JohnHuff]

OK, thanks, that does make sense, and yes, the original check would have been sent 10 years after Mom died (2002-2012). It's not a lot, but we'll put a little aside for income tax time.

Ask an accountant but I believe these are not subject to taxes. That's how some people pass small/medium inheritances on. They buy life insurance that pays out when they die instead of just willing money to their kids.