I have a situation where a person had an annuity, she was the annuitant and her trust was the owner and originally her trust was the beneficiary, but it was later changed to her daughters as beneficiaries. The insurance company accepted the change of beneficiary form and sent a letter confirming the change to the daughters. She passed away and the insurance company is stating that they have to pay the death benefit as a lump sum to the trust because in the contract it states that if the owner is not a natural person, and the annuitant dies before the maturity date, they will pay the value in a single sum. They are saying because it is an annuity and has IRS regulations, and the ownership was still listed as the trust being the owner, this supersedes the beneficary designations. Of course having the death benefit paid as a lump sum to the trust we cannot use the 72(q) payout for the daughters now.
Do you know of any way we can get the insurance company to pay the death benefit to the daughters?