IRA Annuity – what is included in owner’s estate
It is clear that IRA assets are included in the IRA owner’s estate upon the owner’s death.
However, suppose the IRA owner held a qualified annuity purchased with IRA contributions, and the annuity had then been “annuitized” for the joint lives of the IRA owner and his wife. Upon the IRA owner’s death, what (if anything) is included in the estate of the IRA owner? What (if anything) is included in the wife’s estate upon her death at a later date?
Now suppose that the annuity was annuitized for a period-certain of 10 years, and the IRA owner dies first, and then his wife dies before 10 years has elapsed. What (if anything) is included in the wife’s estate upon her death? If anything is included, how is the amount computed?
Permalink Submitted by Alan Spross on Sun, 2011-07-10 03:37
1) Joint annuitized annuity owner and spouse – when owner passes the value receivable by the spouse is included in the owner’s gross estate. Don’t know how to figure that value but it would be based on surviving spouse’s age/life exceptancy. When surviving spouse then passes, nothing would be left to include in the second gross estate since the payments end upon the second death.
2) 10 year period certain – same as above except that the payout left after the wife dies would be included in her gross estate. The amount remaining for wife’s beneficiary would be a set dollar amount to be included in her estate. The amount is no longer based on anyone’s life expectancy therefore this amount is simply the amount of the remaining payments to complete the 10 years.