72(s)
What happens when you have a parent who had a non-qualified annuity and they die with their non-spouse beneficiary electing 72(s) …non-qualified stretch….and then the non-spouse beneficiary dies with funds still left in the non-qualified annuity?
To add a layer of complexity, the non-spouse beneficiary who inherited the funds has named their spouse as the primary beneficiary.
Can the new beneficiary continue this on under the 72(s) or will they need to cash in an pay taxes on gains…
Thank you for any help you can provide.
Permalink Submitted by Alan - IRA critic on Tue, 2017-06-06 16:22
They could continue the original beneficiary’s distribution schedule unless the annuity contract indicates otherwise. The contract is allowed to be more restrictive than the tax code indicates. Also, the successor beneficiary being the spouse of the designated beneficiary has no significance with respect to these distributions.