Joint Spousal Ownership-NQ Annuity
I have been recommending Joint ownwership on some NQ annuities, baecause some carriers pay a death benefit at the death of either owner AND allow spousal continuation. With annuities, there is a primary owner (whose SSN is used as the tax id) and a joint owner can be added. In thnis case, primary ownner’s trust is bene. If primary owner dies, and Jt owner disclaims, the proceeds will be paid to the primary owner’s trust, possibly to fill up the bypass trust. Some attorneys are now saying that even though all of the annuity went into the owner’s trust, only 1/2 would be in their estate. This does not soiund correct. Any thoughts here?
Permalink Submitted by Alan Spross on Wed, 2008-07-02 05:20
I agree with you.
Normally qualified joint property would be 50% in the deceased spouse’s estate, but if the survivor disclaims, the property is no longer qualified joint property. And the marital deduction would not apply either.
Perhaps Bruce can confirm this……….
Permalink Submitted by Bruce Steiner on Wed, 2008-07-02 17:28
If a husband and wife own property jointly, and one spouse dies, the surviving spouse can disclaim the survivorship interest. In that case, the surviving spouse will continue to own 1/2, and the deceased spouse’s 1/2 goes as if he/she had owned a 1/2 interest which had never been jointly owned.
Permalink Submitted by Al Fry on Wed, 2008-07-02 18:03
Could the surviving spouse disclaim the entire amount? Would that 1/2 be a gift to the deceased spouse’s trust?