When looking into putting an annuity into a trust, make sure you are informed enough to avoid the bombshells and set yourself up for success.
Anytime you're talking about trust, you have to work with a qualified lawyer to put it together. If you're working with me, we will be working one-on-one and then we're going to get your lawyer on the phone to have a conversation about if it makes sense. What I'm telling you is, do not take legal advice from anyone other than a lawyer. Understanding the full meaning of the trust is worth paying a lawyer’s hourly fee to make sure that you're not making a mistake of putting your annuity in trust, and having the trust own or be the beneficiary of the annuity contract.
Structuring is equally as important and if you've gone to the detailed time, effort, and money to put together a trust, then we're going to take that same type of pragmatic approach to make sure an annuity makes sense in conjunction.
With a trust, you must go to a lawyer, and have them put it together for you. An irrevocable trust decides how you want your money distributed when you die or while you’re still living as an estate or income tax play. I’d love to have a conversation with you but ultimately lawyers will need to be involved.
An annuity, interestingly enough, includes a little bit of a directive as well. Similar to a trust, annuities are structural contracts and are customizable. With an annuity, you can make sure that the entirety of any unused money goes to the listed beneficiaries of the policy, or you can make sure that your spouse is a joint lifetime annuitant. You may also decide if 100% of the money goes lump sum to the beneficiaries or paid out depending on how confident you are that they can handle the money.
The answer is yes, but because I'm not a lawyer I'm not the person that's going to be making that decision. If you come to me and say, "I want to buy this deferred annuity, Can I put the trust as the beneficiary of the annuity that I'm buying?" Even though I've been doing this for three decades, I'm going to get your lawyer on the line and we're going to ask, "Does this make sense?" Because, when you sat down with them to put this all together, there were specific goals that you were trying to achieve and specific directives that you were trying to hit. With all the hard work you've gone through to accumulate the wealth that you have we want to make sure that adding an annuity will be beneficial.
Now, if your lawyer says, "Yes, this makes sense. Let's have the trust be the beneficiary of this specific annuity type that you and Stan The Annuity Man have come up with.” Then, we're going to need a copy of that trust to give to the issuing annuity company, or life insurance company, for their records. My staff and I will walk you through every bit of those details.
Although combining trusts and annuities may seem intimidating, it can sometimes add value to your lifetime income plan. Book a call with me and we can begin to discuss what works best for you.