non-qualified annuity in irrevocable trust

Submitted by john sklenar on Sat, 2010-04-10 15:33

I was told by an advisor who supposedly read it in an article that you can transfer a non-qualified annuity to an irrevocabe trust and avoid the income taxes on the gains accumulated prior to transfer.

I would like to research this. Does anyone know the correct answer to this? If so, by what authority, case or rationale can it be done?

What a huge benefit, if possible.

Flag as spam

Permalink Submitted by Harve Senter on Tue, 2010-04-13 01:56

Good Question. However, it sounds too good to be true. Call the insurance company involved and ask what they will do. When the telephone rep tells you they cannot give tax advice, go the legal or compliance department and ask the procedure when a non-qualfied annuity changes owners into an irrevocable trust. Someone must notify the IRS when this happens and will know the answer. I believe it IS a taxable event for the growth in the contract. I’ll look for further posts from the CPA’s and lawyers on the forum. Also there might need to be a filing of an IRS 709 form for gifting if over $13,000.