I inherited (as a direct beneficiary) 100% of a non-qualified tax deferred annuity (say $10k for sake of discussion) more than a year ago and am wondering what best to do with the sum I’ll get from it. (I can’t annuitize it over my life as the time period for doing that has passed. I haven’t yet filled out any paperwork saying when or how I’ll take the distribution(s).)

I’m unfamiliar with annuities in general but understand that I can take a lump sum any time up to 5 years from the date of death. (Or that I could ask them to do installments up to the 5-year mark.)

Please let me know if there are any options to shelter the gains in an IRA, etc. … I haven’t read anything suggesting that one could.

I have these specific questions: If about half of the annuity is taxable, what’s the general upshot of the distribution for a California resident who routinely gets hit by the AMT? (It’s possible that next year or the year after, I might not, however.)

Also, what’s generally meant by the disclaimer phrase “The full value as of the date of death is for tax purposes only and is not a guaranteed death benefit amount.”?

Thanks much.