How Do Annuities Avoid Probate? 
Annuities pay a death benefit that is equal to the cash surrender value of the annuity contract . Since the annuity is a contract with a specifically named beneficiary , the death benefit is paid directly to the named beneficiary -LRB- ies -RRB- and does not enter the owners estate where it would need to go through the probate process in order to be paid to any heir of the deceased . 