Trust owned non qualified annuities
Can someone clarify the rules, which I think have changed.
Non Qualified Annuity
Trust is the Owner
Person is Annuitant
Annuity is owner driven
Are pre 591/2 withdrawals subject to 10% penalty?
Thanks
Can someone clarify the rules, which I think have changed.
Non Qualified Annuity
Trust is the Owner
Person is Annuitant
Annuity is owner driven
Are pre 591/2 withdrawals subject to 10% penalty?
Thanks
Permalink Submitted by Al Fry on Tue, 2008-10-07 21:38
If it is a revocable living trust, or a grantor trust (normally using grantor’s SSN), then you are correct. If the trust is a non-grantor irrevocable trust, then distrubutions are always subject to the 10% penalty. The only exceptions are: (a) death of annuitant; or (2) a SPIA. The age exception is based on the contract owner, not the annuitant (IRC Sec. 72(q)).