NQDA Titled under a Trust?
I’ve got a client, age 62 with a NQDA that she doesn’t ever need to use…you know one of those 20+ year old NQs that’s been growing with little cost basis. Anyway, I currently have it titled in the client’s name only (single/divorced), with the children as beneficiaries.
Client recently got a living trust done by a lawyer in town who I’m not too familiar with. He apparently told client that the trust should be the owner of the annuity (I am getting verification of this in a few days). Now, I might just be having a bad night, but isn’t it easier to leave it in the client’s name only and let the money pass to the kids, and give them the option to retitle it as an inherited NQDA and take minimum, annual draws over their life expectancies?
If the trust is the owner, doesn’t the money have to be accounted for by the trust? I can’t remember if it would funnel through the trust at death, and screw up any stretch options.
Edit: I just found this (annuityadvisers), which makes me believe that involving the trust might not be the best idea.