The Legacy Strategy that Passes Greater Values

The Legacy Strategy that Passes Greater Values

Many times, your clients will say they wish to leave a legacy or inheritance to their children or grandchildren. Usually, they think of this as a lump sum of cash or certain personal items. But what about a steady income? You could help them create a longer, and potentially more fulfilling legacy with a joint income annuity.


We’ve had successful results with this concept. Usually, clients want to leave a certain amount of money to their beneficiaries. However, before they pass and give away their remaining assets, they’re going to need a certain amount of income. This strategy solves both challenges.


In this situation, the older client elects to purchase a single-premium immediate annuity and make a child or grandchild a joint annuitant. There are a few advantages to purchasing an annuity in this manner:


  1. The older client enjoys an income guaranteed for life
  2. Income is received with an exclusion ratio, so most of the income is received tax-free
  3. When the older client passes away, the joint annuitant continues to receive the income for the rest of their life
  4. If a cost-of-living rider is attached, the joint annuitant enjoys potentially guaranteed step-ups in income for the rest of their life


Greater Values

This is already a unique strategy to legacy planning, but I encourage clients to take this one step further. I ask them to write letters to their child or grandchild, passing along memories, advice and family values. Along with the funds from the annuity, these letters can be sent at certain life milestones:

  • 16th birthday
  • High school graduation
  • Wedding day
  • Birth of first child 

In these letters, the parent or grandparent can share their wisdom – struggles as a teen, joy in marriage, the challenges of raising a family, etc. These letters are what will make a difference to beneficiaries. The transaction is more than an economic benefit. It becomes an inheritance of a legacy.


Winning Strategy

When it comes to wealth transfer, we tend to think about life insurance or beneficiary designations. Think outside the box to transfer wealth that includes value – family values.

Retirement Webinar

Craving More?

We recently sat down with a few of our top Retirement Income Consultants to gather their perspective from the field. Watch how they helped their territory grow with tools and resources from Ash.

Watch the Replay


About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. You can get his latest book, “Winning Strategies: The New Rules of Retirement Planning,”  on Amazon.