The Problem With Naming a Trust as the Beneficiary of an Annuity
Apr 6, 2015
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By Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC
An annuity with a trust as beneficiary must pay out according to the five-year rule—often with tax consequences due to compressed trust tax brackets. If control is the intent, a trust may be necessary, but a restricted payout option could be an appealing alternative in some situations.