"Dog Face" <mdeckerz[at]NOSPAMhotmail.com> wrote:

- quote -


--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I am the beneficiary on a variable life insurance annuity in
the U.S. and the insured person (not my spouse) died
recently. The death benefit on the policy--which exceeds
the account value--is significantly larger than the insured
person's cost basis, which means that if I take the benefit
as a lump sum, I'll owe significant income tax. I'd like to
avoid that, especially since I don't really need the cash
right now.

I understand that I can roll the death benefit into a
beneficiary, or stretch, account. I'll have to take minimum
annual distributions, but I'll be able to stretch that over
many years.

My question is this. Do I have to set up the beneficiary
account with the same insurer that has written the current
annuity? Can I set it up with a financial company that is
not a life insurance company--say, a mutual fund
company--without triggering a taxable distribution? What
are the costs--administrative fees, etc.--associated with
setting up and maintaining a beneficiary account? Assuming
I can switch companies, which company should I look at for
this?

Thanks in advance for all the answers.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->