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 The
Money Management Newsletter: Insurance
Products
Gradual Inheritance Transfers
By The Money Management Editor
Money Management Newsletter, September 2003
Some parents want to transfer inheritances
to their children gradually, as opposed to one lump sum, after death.
An Annuity Settlement Option can now be added to a Manulife Investments
Guaranteed Interest Contract (GIC), Guaranteed Investment Fund (GIF &
GIF encore), or a Manulife Financial Life Insurance policy. The Annuity
Settlement Option allows you to add this to an existing or new Manulife
contract. Upon death, the proceeds of their contract will be automatically
paid out as a Term Certain or Life Annuity that will then make periodic
payments to beneficiaries for a specific time period, or over their full
lifetime. No fees are charged for adding this option.
Some ins and outs…
This is only an option to an existing investment
product, not a product in-and-unto-itself. So, the first thing you
need to decide, is whether the primary investment is suitable for your
circumstances. Then determine, if combined with your estate planning considerations,
is the purchase and the option, going to do the job for you.
Features and benefits
- Allows you to control the manner
in which assets within your estate are allocated to beneficiaries
- Ensures that younger beneficiaries,
such as children or grandchildren, receive a controlled income stream
(Monthly, Quarterly, Semi-annuall, Annually), rather than a large lump
sum amount
- Provides parents with disabled
children a comprehensive estate-planning tool
- Provides an increased level
of privacy while avoiding costly probate and estate administration fees.
Case study
Richard and Joan own a $400,000 Manulife Investment
GIC, which they want to leave to their 20-year-old-son, Scott, in the
event of their deaths. But Richard and Joan are concerned about Scott's
ability to manage this money and would prefer to have their $400,000 investment
paid out to Scott over a period of time. After discussing the situation
with their advisors, they select a 10-Year Term Certain Annuity Settlement
Option on their Investment GIC. Now , Richard and Joan have added a comfort
in knowing that a portion of their estates will pass to their son gradually
over a 10-Year period after their deaths
| Income payments continue for 10 years
and then end* |
Important Notice:
Guarantee and or Settlement options will depend upon which annuity you
choose. Please speck with your investment/insurance advisor when selecting
investments that may affect the nature of your estate plan and any beneficiaries
income needs.
* * *
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, Fiscal Agents Money Management Newsletter
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