I live in the state of MI and have a lot of clients with Fixed Annuities coming out of surrender. I am thinking about positioning a wealth transfer solution but to do that one would have to surrender their annuity contract and deal with the taxes. However if you initiate a five pay, somewhat of annuitizing the contract, one could spread the tax consequences over the five years. I understand that the annuitization process, for lack of better words, has to be done carefully to avoid paying all the capital gains in the first year. Is my thinking correct??