Non-qualified tax deferred annuities can be individually owned, jointly owned and owned by a qualified “individual” retirement account or “employer’ sponsored qualified retirement account. In the case of a qualified “individual” retirement account or “employer’ sponsored qualified retirement account, the ownership is individual, but for annuitization purposes can be joint annuitants.
Insurance Professional, PMRD Insurance Agency LLC, Murrieta, CA
Absolutely. But there are different rules if the joint owners are a married couple or not (for example, a Father names his daughter as joint owner). If the joint owners of the annuity are married, then it is recommended that each spouse names the other as primary beneficiary. For the spousal exception to the required distribution rules to apply, the surviving spouse must be the designated beneficiary of the contract. These rules are designed to prevent the use of joint ownership to obtain tax deferral on annuity earnings over more than one lifetime, except in the case of married couples. In the event of the owner’s death, the spouse can succeed to ownership by application of the spousal exception to the required distribution rule.
If someone other than the surviving spouse is the designated beneficiary, or even if the spouse is the beneficiary along with another person, then even if the surviving spouse is a joint owner, the spousal exception is lost.
There are some caveats to setting up a jointly owned annuity. It's best to talk to a professional insurance agent to avoid the pitfalls.
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If someone other than the surviving spouse is the designated beneficiary, or even if the spouse is the beneficiary along with another person, then even if the surviving spouse is a joint owner, the spousal exception is lost.
There are some caveats to setting up a jointly owned annuity. It's best to talk to a professional insurance agent to avoid the pitfalls.