Can You Share an Annuity With Someone?

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( — March 18, 2024) — Millions of people all over the world have annuities, but many of them don’t know the specifics of it, like if they can or cannot share them with other people or what exactly fixed annuity rates are. The truth is that sharing an annuity with someone involves complicated financial rules and regulations that require careful consideration of your legal situation and personal factors. 

What is an annuity and how many people have them? Simply put, an annuity is a financial product that is usually offered by insurance companies as a contract created to provide a steady stream of income to someone over a specified period or for the rest of their life. It works as a financial tool usually for retirement planning, although it can also be used for other purposes. Annuities are essentially a form of insurance that is used to fight the risk of outliving life savings. And they are incredibly popular too. Last year, people in America bought around $360 billion in annuities. 

The basic concept of an annuity involves an individual making a lump-sum payment or a series of payments to an insurance company. In return, the insurance company promises to make regular payments to the annuitant, either immediately or at a future date. The payments can be structured in various ways, providing flexibility to meet different financial needs.

There are many different types of annuities and many things that need to be considered if you are attempting to share them with someone else.

Types of Annuities and Ownership Structures

Individual Annuities

The most common form of annuity is something called an individual annuity. This is where a single person owns the annuity and receives the payments. This arrangement is straightforward and provides the owner with control over the annuity as well as its terms.

Joint Annuities

Now, this is one that you should be aware of if you are hoping to share an annuity. A joint annuity involves two people, usually spouses, who both share ownership of the annuity. 

This arrangement promises that both people receive regular annuity payments and those payments can continue until the death of the last surviving individual. At their core, joint annuities were made as a way to provide support financially for a couple and can be a great way to make sure there is income provided for a surviving loved one.

Split Annuities

Split annuities involve dividing the annuity into two parts. One part is for immediate payouts and the other part is for deferred payments. 

This type of annuity allows flexibility when it comes to managing the timing of income payments and may also involve separate people or entire entities set as beneficiaries.

Legal Considerations

There are many legal considerations, rules, and regulations that you need to take into account when you are thinking of getting an annuity and splitting it between yourself and others. 

Contractual Arrangements

The terms of the annuity contract will dictate if it can be shared and under what conditions. 

Certain contracts may allow joint ownership or they could also specify just how beneficiaries can be added.

Tax Implications

Sharing an annuity can have serious tax consequences that you have to consider. The tax treatment of annuity payments depends on various factors, including the type of annuity, the age of the annuitant, and the duration of the annuity. 

Before entering yourself into any type of shared annuity with someone else, it’s important that you understand the tax situation and consult with a professional who can give you guidance and insight.

Practical Considerations

Your decision to share an annuity with someone needs to align with your financial goals and the needs of everyone. Whether it’s providing for a surviving spouse, supporting your children, or achieving a financial objective, the shared annuity should serve the intended purpose and should be the smart, right choice for you.

Relationship Dynamics

Shared annuities usually involve people in close relationships, like spouses, family members, or partners in business. And that can cause some complications that need to be thought of.

It’s vital that you think about the dynamics of these relationships and make sure that the financial arrangements align between all people involved.

Flexibility and Options

These types of contracts often vary, and some offer more flexibility than others. It’s vital to choose an annuity product that provides the desired level of flexibility in terms of ownership and withdrawal options.

Steps to Share an Annuity

So, if you wish to share an annuity with someone, what steps do you need to take to make that happen?

Understand the Existing Contract

Carefully and accurately review all terms and conditions of the existing annuity contract. Look out for clauses related to joint ownership and beneficiary designations.

Contact the Insurance Company

Reach out to the insurance company that created the annuity in order to inquire about the options available for sharing.  They will then provide you with guidance on the specific requirements and any steps that need to be taken.

Create a Formal Agreement

It’s advisable to create a formal agreement outlining the rights and responsibilities of each party. This agreement can talk about contingencies and how to solve any potential disputes.

Challenges and Risks

What sort of challenges and risks are going to meet you when you decide to split an annuity with someone else?

Dependency on Others

Shared annuities usually create a financial connection among the people involved. If one part of the partnership goes through hard times or disputes arise, it might end up impacting the stability of the payments.

Changing Relationships

Relationships evolve and sometimes end over time, and shared annuities that initially made sense may become problematic if relationships deteriorate. It’s essential to consider the potential impact of changing circumstances on the shared annuity arrangement.


Sharing an annuity with someone involves guiding a partnership through a complex landscape of legal, financial, and personal considerations. The type of annuity and the specific goals of the parties involved play an important role in determining if someone should share an annuity. 

Legal and financial advice, along with clear communication among everyone involved, is very important in order to ensure that the annuity arrangement lines up with all objectives while also minimizing any potential risks.