non qualified annuity – benefiicary
What beneficiary rules apply to non qualified annuities?
An annuitant named her trust as beneficiary – but is considering changed to her sons.
What are the pros/cons of naming a trust vs. individual?
Thank you
What beneficiary rules apply to non qualified annuities?
An annuitant named her trust as beneficiary – but is considering changed to her sons.
What are the pros/cons of naming a trust vs. individual?
Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2016-01-28 17:44
Beneficiary rules for NQ annuities are determined by the insurance company and by state laws. To get a specific answer you will have to ask the insurer what options will be available after the annuity owner passes. Individuals may get different options than a trust. The trust provides better creditor protection for beneficiaries and can be drafted to allow the trustee of the trust to retain the distributions in the trust. If retained, higher income tax rates of a trust will apply. A trust may not be practical if the amount of the annuity is small, particularly if the sons are financially literate, responsible and not prone to creditor problems.