There needs to be some way to prevent him from just liquidating the annuity.
JG Wentworth and other predatory companies are adept at helping people liquidate their annuities. I don’t know of any way to stop them.
So I think a trust would be better. The drawback is cost. I think a trust is taxed at a higher rate, plus, a professional trustee would charge a percentage. If anyone has info on those costs, I’d appreciate it. (If not, I’ll find out soon enough after my dad passes.)
I don’t have an answer for OP. One thought I have is that if the amount is too small to make a trust worth the trouble/expense, then it hardly matters. Nephew blows it all in short order, or it’s divvied up into such small amounts over time that it won’t be much help anyway.