A brother and sister are the beneficiaries of Moms annuity. Mom passed away July 2, 2011 but kids didn’t find out about the annuity until March 2012. Neither child needs the money so we presented the Non-Qualified Stretch concept and they liked it and we filled out paperwork for the new accounts in April. Death Benefit paperwork was submitted to other company in Mid-April. The distributing company dragged their feet and said we need certain forms and not other forms and then forms that they said we didn’t need we now need. Other company didn’t process the request in a timely fasion and checks were distrinuted after the July 2nd anniversary of death. Upshot is a distribution needed to be taken by the anniversary of death which was July 2nd. Two annuities, one for 232K and the other was 5K and the 5K was liquidated and distributed. Will that count as taking a distribution before the anniversary of death? My assumption is that it will because it is like taking an RMD from one IRA account eventhough there are 3 total IRA accounts. If is doesn’t count as a distribution, can we still Stretch this Non-Qualified annuity based on the paperwork being submitted in Mid-April and the distributing company taking 3 1/2 months to send the proceeds out?

Any quidance would be greatly appreciated.

Thanks, C Sanders