Lovingly Handcuffing Your Beneficiaries with Annuities: Shootin' It Straight With Stan (TAM Classic)

Welcome to Shootin' It Straight With Stan. I am your host, Stan The Annuity Man, America's annuity agent, licensed in all 50 states, sporting the new fashionista annuity Goatee. It's the talk of Paris. It's the talk of fashion week. It's the talk of the town—except in my town, where my wife says, "Shave the goatee. Okay, what are you doing?" I'm like, "I don't know. Annuity goatee." Today's topic is a good one, and it’s a personal one. I can share some stories. It’s called Lovingly Handcuffing Your Beneficiaries with Annuity Guarantees.

Lovingly Handcuffing Your Beneficiaries with Annuity Guarantees

So, lovingly handcuffing your beneficiaries with annuity guarantees. You’re saying, "Wait a minute, what? Handcuffing, that doesn't sound lovingly." It does when it comes to finances. A lot of us out there, including me—that’s French for me—I have two great daughters, 27 and 25 years old at the time of this blog. One lives in Denver, Colorado, and one lives in Manhattan's East Village. She went to NYU and loves the city. She's a lot like her dad. I love New York City too. But they are great kids, and thank God, they look like their mother and take after her.

But when I die, they will not be getting lump sums, period. It’s nothing against them. It’s just that I’m going to lovingly handcuff them so they don’t make dumb mistakes with lump sums. So, you're probably thinking, "Wait a minute, how do you do that, Stan The Annuity Man?" Well, that’s what this video is for. So, what I’ve done is in the trust, I’ve specified that when I die, when my Learjet hits the mountain, when the Lamborghini hits the tree, when I can't put on The Annuity Man hat anymore and I die, and my goatee is 12 inches long, that’s when the annuity kicks in.

Lifetime Income Annuities for My Daughters

When that happens, lifetime income annuities will be purchased for each daughter for the rest of their lives. Regardless of when I die, if I die four years from now, for example, an Immediate Annuity will be purchased for a 30-year-old and a 28-year-old at that point in time. Understanding that Single Premium Immediate Annuities are primarily priced on life expectancy at the time of the payment, with interest rates playing a secondary role. That’s what I’ve done, and that’s what they’ll get. They’re going to hate me every single month when that money hits their bank account. What have I done? I’ve lovingly handcuffed them.

The Deferred Income Annuity

I’ve also bought a Deferred Income Annuity. I’m not sure I recommend this, but I did it just to see what the numbers were—and they were pretty good. So, I bought it, whatever. I’m impulsive, and that’s just who I am. I bought them a Deferred Income Annuity a while back, deferring it until they’re age 50. It will turn on when they reach age 50, providing a lifetime income stream. I’m not sure that’s the perfect strategy because it’s an irrevocable contract with no liquidity, but unless they read this blog—which they won’t—they don’t even know they have it. I bought it, but they don’t even know it exists. So, that’s another way to do it.

Creating an Income Stream for Your Beneficiaries

When I talk about lovingly handcuffing beneficiaries, I believe we’re doing them a favor by creating a payment income stream for them to supplement any job they may have or any Social Security in the future—if that exists. There may be a means test that gets Social Security out of the way, but I’m just a firm believer in doing that. I’m a firm believer in setting things up so that the kids will have an income stream. You can do that for grandchildren as well. I’ll probably go back to the trust and lovingly handcuff them. Instead of getting a lump sum, I would set up a lifetime income stream for them triggered upon my death. My wife and I are now discussing this. The lovely Christine of 35 years—married to Stan The Annuity Man—isn't crazy about that idea, but it works in marketing. We’re talking about doing something similar when she passes away, as I’ve set up the same structure for her. It’s not lovingly handcuffing my wife—she’s getting a lump sum—but I also want to put an income floor in place for her when I pass away.

Helping Beneficiaries Avoid Mistakes

But you can lovingly handcuff your beneficiaries. I get calls all the time. Just the other week, someone scheduled a call, and they said they wanted to buy an Immediate Annuity because their son had substance abuse issues—what I call “wandering ambiguity.” He couldn’t get it together, and they didn’t want to give him a lump sum. So, what do you do? You buy him an Immediate Annuity. They get mad at you for that.

I’ll never forget a case from 20 years ago when I used to do face-to-face appointments. I flew in somewhere for a big case, and we were lovingly handcuffing one of the beneficiaries. That beneficiary thought they would get a lump sum, but they found out they were signing a paper to receive an Immediate Annuity. I was cussed out pretty well, but you know what? It was the right thing to do. The father asked me, “Was that the right thing?” And I told him, “That was the right thing to do.”

The Legacy of Income Streams

I want you to think about that. Think about your kids and your grandkids. If they’re solid and rational, give them a lump sum. 90% of the time, that’s probably what you’ll do. But I believe in income flow. I believe in payments that hit the bank account every month. I want that for my daughters, and I want that for my wife. I don’t want them to worry, and I want them to know that lifetime income is coming in every single month.

Could they do better with a lump sum and buy the best stock in the world? Probably. But why take that chance? And what a legacy! My daughters, who put up with me and my eccentricities, will see that money hitting their bank account every month—even 20 years after I’m gone. As much as I was an eccentric and eclectic father, they’ll say, “Eh, he was goofy, but I’m glad he did that.”

Conclusion

So, think about it—lovingly handcuffing your beneficiaries. You can do that with annuity contractual guarantees. You can do it now and buy something that kicks in later, or you can set up a trust and have the trust dictate a lifetime income stream for whoever you deem appropriate at the time of your death. Just remember, death is not a strategy because you can only use it once. But wouldn’t it be good to know that no matter what happens, they’ll be taken care of and that income stream will be in place? If Social Security is taken away, they’ll have their own income that you set up for them. If pensions no longer exist, they’ll have the pension you structured. Talk about legacy—this is a legacy income monster.

And I’m a monster—kind of. I’m a monster in the annuity industry. I’m a monster of information. I’m a monster of entertainment and education, which is called edutainment. I appreciate you joining me today. Go to my site at The Annuity Man, run quotes, read the books, and schedule a call. We will tell you the truth, and my team will tell you the truth, which is a good thing. We’ll let you know if you need an annuity or not, but we’d love to work on legacy-type products, lovingly handcuffing your beneficiaries, and doing them a favor long-term.

My name is Stan The Annuity Man. That’s Shootin’ It Straight With Stan. See you next time.