Qualified Annuity Non-spousal beneficiary
Case in point…client has an annuity (Allianz) within his IRA. It has been not been annuitized. He has named several non-spousal beneficiaries. Will these beneficiaries receive the proceeds as an inherited IRA or will they be receiving their proceeds as a taxable distribution from the annuity company?
Thanks!
Permalink Submitted by Alan Spross on Thu, 2010-08-05 19:53
As an inherited IRA. For an IRA annuity or annuity held in an IRA account, the IRA distribution rules trump the annuity distribution rules. The client’s beneficiaries should create their separate beneficiary IRAs no later than the end of the year following the client’s death. This will allow each of them to use their own life expectancies, as well as individual control of the investments.