Parents, concerned as always with their children, even when adult, worry about leaving large sums of cash in their Wills.
Some children get married have their own children, solid jobs and a socially acceptable way of life. To them an inheritance can be left with little fear that it will be wasted.
But that is not the case with each child. Frequently as brokers, we are asked to design plans where the inheritance for a child can be made by way of an annuity. The two main reasons to select an annuity are that it is guaranteed for the life of the child and that it cannot be cashed. Thus the annuity, while providing lifetime income , prevents the child from having access to the capital.
This result can be achieved with a life annuity in a couple of ways.The first way is to have a joint life annuity with a parent and a child as joint annuitants, but the parent being the owner . As owner the parent receives the income during his or her lifetime and which passes to the child at death.
The second way is for the parent to invest funds today which will automatically purchase a life annuity at his or her death. Thus the capital invested has a chance to grow further before being annuitized. This should make for a larger annuity payment for the child when the annuity starts to pay out.