Looking for a Form 706 Templates? Download it for free!

decedent’s creditors, the decedent’s

These rules apply to all types of

3. A contract or agreement entered

estate, or the creditors of the decedent’s

annuities, including pension plans,

into by the decedent and employer under

estate).

individual retirement arrangements, and

which the decedent immediately before

purchased commercial annuities.

death and following retirement was

The part to include in the gross estate

receiving, or was entitled to receive, an

An annuity contract that provides

as a general power of appointment is

annuity payable to the decedent for life

periodic payments to a person for life and

figured by dividing the value of the

and after the decedent’s death to a

ceases at the person’s death is not

property by the number of persons

designated beneficiary, if surviving the

includible in the gross estate. Social

(including the decedent) in favor of whom

decedent, whether the payments after the

Security benefits are not includible in the

the power is exercisable.

decedent’s death are fixed by the contract

gross estate even if the surviving spouse

or subject to an option or election

Date power was created. Generally, a

receives benefits.

exercised or exercisable by the decedent.

power of appointment created by will is

An annuity or other payment that is not

However, see Annuities Under Approved

considered created on the date of the

includible in the decedent’s or the

Plans, below.

testator’s death.

survivor’s gross estate as an annuity may

4. A contract or agreement entered

A power of appointment created by an

still be includible under some other

into by the decedent and the decedent’s

inter vivos instrument is considered

applicable provision of the law. For

employer under which at the decedent’s

created on the date the instrument takes

example, see Powers of Appointment, on

death, before retirement, or before the

effect. If the holder of a power exercises it

page 14.

expiration of a stated period of time, an

by creating a second power, the second

annuity was payable to a designated

If the decedent retired before January

power is considered as created at the

1, 1985, see Annuities Under Approved

beneficiary, if surviving the decedent.

time of the exercise of the first.

However, see Annuities Under Approved

Plans below for rules that allow the

Plans, below.

exclusion of part or all of certain

Attachments

annuities.

5. A contract or agreement under

If the decedent ever possessed a power

which the decedent immediately before

of appointment, attach a certified or

Part Includible

death was receiving, or was entitled to

verified copy of the instrument granting

If the decedent contributed only part of

receive, an annuity for a stated period of

the power and a certified or verified copy

the purchase price of the contract or

time, with the annuity to continue to a

of any instrument by which the power was

agreement, include in the gross estate

designated beneficiary, surviving the

exercised or released. You must file these

only that part of the value of the annuity

decedent, upon the decedent’s death and

copies even if you contend that the power

receivable by the surviving beneficiary

before the expiration of that period of

was not a general power of appointment,

that the decedent’s contribution to the

time.

and that the property is not otherwise

purchase price of the annuity or

6. An annuity contract or other

includible in the gross estate.

agreement bears to the total purchase

arrangement providing for a series of

price.

substantially equal periodic payments to

Instructions for Schedule I.

For example, if the value of the

be made to a beneficiary for life or over a

Annuities

survivor’s annuity was $20,000 and the

period of at least 36 months after the date

decedent had contributed three-fourths of

of the decedent’s death under an

You must complete Schedule l and file it

the purchase price of the contract, the

individual retirement account, annuity, or

with the return if you answered “Yes” to

amount includible is $15,000 (

bond as described in section 2039(e)

question 15 of Part 4, General

$20,000).

(before its repeal by P.L. 98-369).

Information.

Except as provided under Annuities

Enter on Schedule I every annuity that

Under Approved Plans, below,

Payable to the decedent. An annuity or

meets all of the conditions under General,

other payment was payable to the

contributions made by the decedent’s

below, and every annuity described in

employer to the purchase price of the

decedent if, at the time of death, the

paragraphs (a) – (h) of Annuities Under

decedent was in fact receiving an annuity

contract or agreement are considered

Approved Plans on page 16, even if the

or other payment, with or without an

made by the decedent if they were made

annuities are wholly or partially excluded

enforceable right to have the payments

by the employer because of the

from the gross estate.

continued.

decedent’s employment. For more

See the instructions for line 3 of

information, see section 2039.

Schedule M for a discussion regarding

Right to receive an annuity. The

Definitions

the QTIP treatment of certain joint and

decedent had the right to receive an

survivor annuities.

annuity or other payment if, immediately

Annuity. The term “annuity” includes one

before death, the decedent had an

or more payments extending over any

General

enforceable right to receive payments at

period of time. The payments may be

In general, you must include in the gross

some time in the future, whether or not at

equal or unequal, conditional or

estate all or part of the value of any

the time of death the decedent had a

unconditional, periodic or sporadic.

annuity that meets the following

present right to receive payments.

Examples. The following are examples

requirements:

•

of contracts (but not necessarily the only

It is receivable by a beneficiary

Annuities Under Approved

forms of contracts) for annuities that must

following the death of the decedent and

Plans

be included in the gross estate.

by reason of surviving the decedent;

•

The following rules relate to whether part

The annuity is under a contract or

1. A contract under which the

or all of an otherwise includible annuity

agreement entered into after March 3,

decedent immediately before death was

may be excluded. These rules have been

1931;

receiving or was entitled to receive, for

•

repealed and apply only if the decedent

The annuity was payable to the

the duration of life, an annuity with

either:

decedent (or the decedent possessed the

payments to continue after death to a

•

On December 31, 1984, was both a

right to receive the annuity) either alone

designated beneficiary, if surviving the

participant in the plan and in pay status

or in conjunction with another, for the

decedent.

(for example, had received at least one

decedent’s life or for any period not

2. A contract under which the

benefit payment on or before December

ascertainable without reference to the

decedent immediately before death was

31, 1984), and had irrevocably elected

decedent’s death or for any period that

receiving or was entitled to receive,

the form of the benefit before July 18,

did not in fact end before the decedent’s

together with another person, an annuity

1984; or

death; and

payable to the decedent and the other

•

The contract or agreement is not a

person for their joint lives, with payments

Had separated from service before

policy of insurance on the life of the

to continue to the survivor following the

January 1, 1985, and did not change the

decedent.

death of either.

form of benefit before death.

-15-

Instructions for Schedules

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2005 Page 15

Related Articles

Related forms

Related Categories