626 / In the case of a refund or period-certain annuity, is the balance of the guaranteed amount, payable after annuitant’s death, includable in the annuitant’s gross estate?

If payable to the annuitant’s estate, it is includable in his gross estate under IRC Section 2033, as a property interest owned by him at death.

If payable to a named beneficiary, and the annuitant purchased the contract (after March 3, 1931), it is includable in the annuitant’s gross estate under IRC Section 2039(a). It is immaterial whether the beneficiary designation was revocable or irrevocable.

If the refund beneficiary is a charitable organization, the value is included in the annuitant’s estate, but the estate is also entitled to a charitable deduction for the value of the transfer to the charitable organization.¹ However, where a decedent has directed his executor to purchase a refund annuity for a personal beneficiary and to name a charitable organization as a refund beneficiary, the decedent’s estate is not entitled to a charitable deduction for the value of the refund.²