The clients are aged 86 (husband) and 72 (wife). He has owned this NQ Annuity since 2013. It has an income rider; however, circumstances have changed for the better. Therefore, the income hasn’t been needed, and the annuity remains deferred. He is the current owner and annuitant. There’s a significant chance the much younger wife will far outlive her husband. They want to 1035 exchange the annuity to one with better income options for her younger age. His older age prevents him from doing a 1035 exchange due to maximum age limits at many insurance companies. Would it be considered a taxable event to change the ownership and annuitant at the existing insurance company to his younger wife, and then perform a 1035 exchange since her younger age allows her unlimited options to available annuities and income riders? If the tax code makes allowance for it, could the insurance company still treat it differently? I apologize for the non-IRA question. I very much appreciate your time and knowledge.

Have a blessed Easter weekend.