Originally published in Estate Planning Magazine (April 2012, Vol. 39/No. 4).

In the journey of planning and administering estates and trusts that include assets in traditional individual retirement accounts (IRAs) and nonqualified tax-deferred annuities (annuities), the planning professional often finds him or herself in two parallel universes. While the rules governing the lifetime use and post mortem distribution of each often echo one another, they also each carve out their own idiosyncrasies. Knowing where those rules align and where they chart their own paths is critical to analyzing, planning, and administering such estates and trusts. This article gives an overview of what the rules say and what to do once traditional IRAs and annuities are funded, looking at life before age 59½, life after reaching 59½, and post mortem issues. As the article focuses exclusively on the rules applicable to traditional IRAs and annuities that are not part of a qualified retirement plan, it does not explore the tax rules governing Roth IRAs and annuities under a qualified retirement plan as defined in Section 4974(c).