Nonqualified annuity death benefit and ten year rule
Good day. I have a new client that received an inheritance in the form of numerous annuities, both qualified and nonqualified. The Dad passed on 8/21/2021. The rule now requires the first distribution to begin within the one-year time of death. She also hasn’t filed tax returns or insurance companies. Is an exception or an IRS form still allowing the ten-year option on the nonqualified accounts since she missed the deadline?
Any help is appreciated. I can’t find the answer to this on the web.
Glenn Toussaint
Permalink Submitted by Alan - IRA critic on Thu, 2022-09-15 15:00
NQ annuities are not subject to the RMD rules of Sec 401(a)(9), although IRA annuities are. NQ annuity distributions are determined by each insurance company and in some cases by state law, and the first life expectancy distribution has been due within 12 months of the actual DOD for some time now. Client will have to ask the insurance company what her options are now. Her first beneficiary RMD for any IRA annuity is due by 12/31/2022.
Permalink Submitted by GLENN Toussaint CFP,ChFC,CLU,AAMS,AWMA,AEP on Fri, 2022-09-16 15:45
Thank you,Alan. My question refers to the NQ annuity and the 10 year rule election the beneficiary can use, opposed to the five year and lump sum option election. The person is passed the one year from DOD to take the first distribution under the ten year rule. Is there any way to still elect the ten year?