While Living:
Non–Qualitfied–Gifting

Gifted to beneficiary, tax liability is passed to owner, subject to annual gift exclusion – currently $11,000. Client may use lifetime exclusion while living. Gift tax considerations to be accounted for, and dealt with, in the future in regard to the lifetime $1 million limit.

Upon Death:
Non–Qualitfied

Beneficiary pays income tax on value above basis.

Qualitfied–2 Options

Payment directly to beneficiary Beneficiary pays income taxes
– or –
Beneficiary IRA or stretch IRA Follows date of birth of beneficiary(s) Pays RMD to beneficiary Beneficiary pays income taxes
**Clients should consult their tax advisors because four tax questions may be at issue – state income tax, federal income tax, federal estate tax, and state inheritance tax.