Refusal of Trustee-to-Trustee transfer
Equitrust Life insurance refuses to allow trustee-to-trustee transfer for a non spouse beneficiary [niece and a friend] of and IRA annuity. Niece cannot find annuity contract to check language and company will not send a sample policy to me, the agent.
Question 1: Is there any federal law or regulations that can over ride this company’s refusal? My client died at age 66 with $130,000 in an IRA annuity with Equitrust.
Question 2: They will split the annuity in half as equal beneficiaries but mandate a lump sum payout now or in five years, not over five years. Is this is in violation of law?
Question 3: Would contacting their legal department asking for an exception – from and attorney on his letterhead – possibly get us an exception?
All agents selling any Equitrust policy should be aware or this hateful policy and avoid Equitrust at all costs or up their E&O insurance!
Permalink Submitted by mk foss on Mon, 2009-02-23 22:58
The IRS regulations provide for the most flexible options for retirement plan distributions. The plan organizer or insurer can require more restrictive rules, and most often qualified plans and annuities do so. Often an annuity will provide for a lump sum payment to a beneficiary if the decedent was not receiving annuity payments at death.
You need to see if the insurer is adhering to the signed contract. If they are, there’s no IRS rule that helps.
Permalink Submitted by Al Fry on Mon, 2009-02-23 23:46
Go up the foodchain a bit, they should allow it. You may have to first get it into inherited IRAs there, then open up shell inherited IRAs at the new custodian and let them get the transfer.