There are some clients that want to control their money and all financial decisions when they are living, and there are others that want to take it a step further. For those clients, there are variable annuity companies out there that allow them to do just that on qualified or non-qualified accounts. With the use of one additional form, the client can control how the death benefit on their account is distributed to their beneficiaries. Thus, control from the grave.
For example, John Doe established a variable annuity contract using the restricted beneficiary form for his three children Jeff, Jim, and Jane. Jeff, age 34, has always been responsible with his money, and there is no reason to think he would do anything different with his inheritance. For this reason, John decides that there is no need to restrict Jeff’s portion of the death benefit and leaves the decision up to Jeff. Jim, age 30, has always had problems running through any money he could get his hands on. Due to his spendthrift nature, John decided to restrict his portion of the death benefit to life expectancy distributions only. Jane, age 25, seems to be responsible, but John feels that if she gets a large chunk of money at a young age, she might blow through it. For this reason, John decided to restrict Jane’s portion of the death benefit to receive a certain amount of income until age 45, and then she has access to the remaining amount.
As you can see, when using the restricted beneficiary form, you can restrict one or multiple beneficiaries as well as restrict them in different ways if you need to. To discuss this idea in more detail as well as what specific contracts work using this approach, please give me a call.
Contact Micah Hesting for more information:
Advisor Relationships/Business Development Strategist