by John D. Darer CLU ChFC CSSC RSP CLTC
Beneficiaries of inherited retirement annuities who were unhappy with the annuity
contracts and companies that they inherited from the decedent when he or she passed away may have some new options up for those who follow the 1035 exchange guidance.
In PLR 201330016 the IRS has tackled the issue of 1035 exchanges of non-qualified inherited annuities by a beneficiary, and provides guidance about how such exchanges can be accomplished in the future:
A key take away is that the new contract must provide that distributions will occur at least as rapidly as they were scheduled to occur under the original inherited contract. As long as that requirement is met, and the other standard rules for 1035 exchanges are followed, beneficiaries should be able to make exchanges to new annuity contracts that perhaps better fit their individual needs and circumstances.
Note that a Private Letter Ruling applies to a particular tax payer and a particular set of facts.