This is to elaborate on the situation from a couple of posts prior: The husband died, age 55, with an IRA annuity that still has surrender charges on the contract. It will pay full death benefit, however, the annuity company is suggesting a spousal continuance which will subject the widow to the surrender charges for future distributions. We want to have the spouse take the penalty free death benefit and move the money to a new annuity with another company. If she does a spousal continuation, then there will be surrender charges on the transfer to the new company. The existing company is being difficult and says they will not do a trustee to trustee transfer on the death benefit. It is my understanding that when the spouse is the named beneficiary they can accept the death benefit directly and rollover the proceeds to the newly formed IRA. How does the new IRA need to be titled in order to avoid a taxable event on the rollover? What mistakes do we need to avoid?
Thank you