However, this rule does not apply for gifts of future interests of property, which includes transfers resulting from
joint and survivor annuities.
*
Joint and survivor annuities. Usually acquired by a married couple, the first annuitant receives a definite amount at regular intervals for life.
(Refund guarantees are offered with contracts covering a single life and joint life annuities that terminate on the first death, but refund guarantees are not likely to be found with
joint and survivor annuities.)
The life expectancy multiples for joint and survivor annuities are taken from Tables II and IIA or Tables VI and VIA, whichever are applicable.
Some joint and survivor annuities provide that the size of the annuity payment will decrease after the first death-regardless of which annuitant dies first (e.g., joint and V or joint and % survivor annuity).
The "expected return" is the total amount that the owner (or owners) should receive given the payments specified (which include an assumed internal growth rate) multiplied by the certain term or life expectancy according to the government's tables (currently Table V for single lives and Table VI for joint and survivor annuities).
Annuities whose payments continue until the last death of the covered lives are called joint and last survivor annuities, or just joint and survivor annuities. Those annuities whose payments cease upon the first death are called joint life annuities.
As a practical matter, many
joint and survivor annuities are purchased by married couples.
Straight-life and
joint and survivor annuities. If the employee is single at retirement, he or she will receive a straight-life annuity.
Valuing
joint and survivor annuities also requires recognition of the potentially important interactions between the members of a married couple, such as joint consumption, interdependent utilities, and correlated mortality rates.
However, if the donor spouse (i.e., the contributing individual) designates a beneficiary, the donee spouse's interest in the IRA would be a nondeductible terminable interest and the marital deduction would not be allowed, except in the case of certain
joint and survivor annuities (see Q 732).
If the plan offers two
joint and survivor annuities that are actuarially equivalent, the plan must specify which is the QJSA.
