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Loren, Attorney
Category: Estate Law
Satisfied Customers: 34486
Experience:  30 years experience in the practice of estate law.
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In a case where the only named beneficiary to an annuity

Customer Question

In a case where the only named beneficiary to an annuity predeceases the annuitant, (2years) what happens to the share of the annuity? The issuer has an irrevocable beneficiary clause, and upon being informed the sole beneficiary had died, wouldn't allow the owner to changed/update the policy beneficiary/beneficiaries. So, does it get paid to the predeceased Estate and distributed from there by beneficiary's probate? Or, does the policy have to be paid to annuitant's estate?
Submitted: 2 months ago.
Category: Estate Law
Expert:  Loren replied 2 months ago.

I am Loren, a licensed attorney for over 30 yrs. Thank you for your patience as I review the question. I will post my response shortly.

Expert:  Loren replied 2 months ago.

Have you checked the policy to see what the provision is for the death of a beneficiary? The policy would need to address that.

Expert:  Loren replied 2 months ago.

Typically, the terms would provide, where there is no surviving beneficiary, the death benefit would be paid tot he annuity owner's estate. So, that is what will likely occur, unless the terms of the annuity provide otherwise.

The fact that the beneficiary is irrevocable is not an issue, if they have died, since the irrevocability merely relates to the designation of a new beneficiary which the irrevocable beneficiary is living.

Customer: replied 2 months ago.
What if the policy makes no mention of it? Is it vested in the beneficiary? Or, does it pass through annuitants will/estate?
Expert:  Loren replied 2 months ago.

It would likely be paid to the annuitants residuary estate. The beneficiary, even if irrevocable, is very unlikely to have death benefits

Expert:  Loren replied 2 months ago.

The irrevocability has to do with changing beneficiaries while the annuitant and irrevocable beneficiary are living. It does not make payment irrevocable. The beneficiary must be living to receive any benefits.

Expert:  Loren replied 2 months ago.

Did you have further questions? Have I answered your question?

Expert:  Loren replied 2 months ago.

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