Question to an expert
My father had purchased a property as a life annuity, which I inherited, should I continue to pay the annuity?
During a life annuity sale, a seller (“annuitant”) transfers property to a buyer (“annuitant”) against the payment of an annuity, often until the death of the seller.
It is therefore customary to deal with the effects of the death of the latter, which generally results in the end of payment of the annuity. What if the buyer predeceases him? The death of the debtor does not terminate the contract. The buyer’s heirs are required to pay the annuity until the death of the annuitant, indivisible and jointly.
This means that the debit holder can turn to only one of the heirs and ask them to pay the total amount of the annuity. It will be up to this heir to make arrangements with his co-heirs so that they contribute up to their share in the inheritance.
Annuities, a debt of the deceased
Failure to pay the annuity is heavily sanctioned. The annuitant can obtain payment of a penalty per day of delay and cancellation of the sale. Depending on how the deed is drawn up, the resolution of the sale may mean that the annuitant regains ownership of the property without having to return the sums received to the heirs of the annuitant.
For tax purposes, the annuity will have to be taken into account in the inheritance declaration. Because if the property is found in the assets of the estate, the annuities remaining due constitute, conversely, a debt of the deceased. They will be capitalized in the liabilities of the estate according to the life expectancy of the annuitant. For an occupied life annuity – when the seller can continue to live in the accommodation – this right will also have to be taken into account to evaluate the property in the estate.