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| A straightforward 2025 guide showing how millionaires legally pay zero tax using annuities, offshore structures, and trusted financial entities. |
How Millionaires Use Annuities to Pay $0 in Tax (2025 Playbook)
In 2025, more millionaires are strategically leveraging annuities to minimize — or even eliminate — their income tax liabilities. While traditional tax shelters are under increasing scrutiny, annuities remain one of the few IRS-compliant vehicles that offer both guaranteed returns and significant tax deferral benefits.
Here’s how the ultra-wealthy are playing the annuity game in 2025:
- Private Placement Annuities: Used to shelter investment income from current taxation, especially gains from hedge funds and private equity.
- Offshore Annuities: For HNWIs with global tax exposure, offshore annuities offer privacy, asset protection, and legally deferred tax obligations.
- Charitable Gift Annuities: Combine philanthropy with tax write-offs while still offering lifetime income.
💡 Why Annuities Still Work in 2025
The IRS tax code hasn't changed much around annuities, and smart structuring via trusts or LLCs allows HNWIs to layer protection, privacy, and deferral.
In fact, this retirement trust strategy pairs perfectly with annuity plans for long-term tax-free drawdown.
🔍 Insider Moves: Where Millionaires Are Setting Up Their Structures
- Forming an LLC in Wyoming or Delaware via doola
- Establishing a domestic trust via Northwest Registered Agent
- Using Wise for cross-border annuity payments without fees
⚠️ What to Avoid
Not all annuities are tax-efficient. Fixed index annuities with high fees and surrender periods can erode gains. Also, using the wrong entity structure can trigger premature tax events.
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Written by info-exclusive™ editorial team