Fixed annuity

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Feb 4, 2009 11:50 am

A business customer would like to put about one third of his profit sharing plan trust into a fixed annuity for a better rate.    I have never done this before.

 
The owner will be the profit sharing trust with the annuitant being the individual.
 
Who is generally the beneficiary in this type of setup?   
 
Any pitfalls I should be aware of??? Client simply wants best rate without principal risk
 
Thanks in advance
 
scrim
Feb 4, 2009 12:21 pm

Scrim, not for nothing, but isn't this a question best posed to your B/D or the insurance company that would write the annuity?  I find anytime you get into odd owner/annuitant/beneficiary situations, it's best to get it in writing from someone with authority.


Aside from that, I think the beneficiary would be the trust, or the B/D where the annuity PS plan is being held.  If the beneficiary is an individual, and the annuitant dies, then it would bust the Qualified status of the trust and become taxable.  Sort of like holding an annuity inside an IRA.
But, I may be WAY wrong on this.
Feb 4, 2009 12:35 pm
B24:

Scrim, not for nothing, but isn't this a question best posed to your B/D or the insurance company that would write the annuity?  I find anytime you get into odd owner/annuitant/beneficiary situations, it's best to get it in writing from someone with authority.


Aside from that, I think the beneficiary would be the trust, or the B/D where the annuity PS plan is being held.  If the beneficiary is an individual, and the annuitant dies, then it would bust the Qualified status of the trust and become taxable.  Sort of like holding an annuity inside an IRA.
But, I may be WAY wrong on this.




You are.

Feb 4, 2009 1:49 pm

Hank:


I enjoy your comments for the most part, but how about providing some valuable information like why he is wrong. Your snappy comments are enjoyable, but I for one would like facts instead of snappy comments.


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Feb 4, 2009 1:58 pm
JackBlack:

Hank:


I enjoy your comments for the most part, but how about providing some valuable information like why he is wrong. Your snappy comments are enjoyable, but I for one would like facts instead of snappy comments.




You want to eliminate your source of enjoyment?

Feb 4, 2009 3:32 pm
 
Hank:
Yes I do. I like facts even more. So tell us why he was wrong.
Feb 4, 2009 3:50 pm
JackBlack:
 
Hank:
Yes I do. I like facts even more. So tell us why he was wrong.




I don't want you to enjoy learning what he was wrong about.

Feb 4, 2009 4:00 pm
Hank Moody:
JackBlack:
 
Hank:
Yes I do. I like facts even more. So tell us why he was wrong.




I don't want you to enjoy learning what he was wrong about.

 
Why?
Feb 4, 2009 4:57 pm
JackBlack:
Hank Moody:
JackBlack:
 
Hank:
Yes I do. I like facts even more. So tell us why he was wrong.




I don't want you to enjoy learning what he was wrong about.

 
Why?



You just stated that you wanted to eliminate your source of enjoyment. I don't care if you understand why I said it or not.

Feb 4, 2009 7:53 pm

It's like an Abbott & Costello act.

Feb 4, 2009 7:54 pm
Hank Moody:
B24:

Scrim, not for nothing, but isn't this a question best posed to your B/D or the insurance company that would write the annuity?  I find anytime you get into odd owner/annuitant/beneficiary situations, it's best to get it in writing from someone with authority.


Aside from that, I think the beneficiary would be the trust, or the B/D where the annuity PS plan is being held.  If the beneficiary is an individual, and the annuitant dies, then it would bust the Qualified status of the trust and become taxable.  Sort of like holding an annuity inside an IRA.
But, I may be WAY wrong on this.




You are.

 
I AM the beneficiary?
Feb 4, 2009 8:24 pm

Hank just enjoys supporting the competition, just ignore him.

Feb 4, 2009 10:38 pm

I know.  It was a joke.

Feb 6, 2009 4:19 pm

Contact me.    I work for a company that specializes in just what you're talking about.  Wide array of fixed annuities.

Feb 19, 2009 5:03 pm
scrim67:

A business customer would like to put about one third of his profit sharing plan trust into a fixed annuity for a better rate.    I have never done this before.

 
The owner will be the profit sharing trust with the annuitant being the individual.
 
Who is generally the beneficiary in this type of setup?   
 
Any pitfalls I should be aware of??? Client simply wants best rate without principal risk
 
Thanks in advance
 
scrim



We've put PSP and 401(k)'s in VAs.  Owner is the plan or trust, and annuitant is the trustee or the plan participant.  Don't know of any pitfalls.  You may want to talk to the TPA for the plan.