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The Importance Of An Annuity Specialist In Estate Planning

By Cory Bowman

Annuities offer two key advantages when it comes to estate planning: speed and privacy. An annuity specialist can designate one or more beneficiaries for the client’s annuity rather than have the annuity made payable to the client’s estate. A client’s ‘estate’ is the sum of his or her assets, including legal rights and entitlements to property of any kind, not including any current liabilities. Clients may find it beneficial to estimate the dollar value of his or her estate, which can help not only with general planning, but also to predict whether or not the estate will be liable for estate taxes. The value of the estate will most likely be worth a different amount when the client passes away, so determining precise figures is not necessary. At a certified annuity school, financial specialists will learn the specifics of the estate planning process.

The most important decisions that an annuity specialist will help make pertain to which involved party gets what and when they will get them. Although clients may have an idea of who should inherit each of their properties, a number of issues exist that the client should consider, including naming alternate beneficiaries and staggered inheritances. Naming beneficiaries often proves to be less complicated than making an annuity payable to the estate, which will have to pass through the client’s will. Every client should have a will, as it is essential to estate planning. The executor named in the will has legal authority to administer the transfer of property covered in the will. Although having a will is highly suggested, there is one main drawback: property left by a will must go through probate.


The annuity specialist and his or her client should not decide what property to transfer by will until he or she has looked at transfer methods that avoid probate. No matter what decisions are made to avoid probate, a will is still needed. At a minimum, a will is a backup device essential to the transfer of any property that somehow was not transferred by other methods, such as property that was overlooked or unexpectedly acquired. In almost all US states, a will is the only document used to name a personal guardian for minors. For some types of property, such as a personal checking account or a vehicle, a will may be the best way to make transfers. If one or more beneficiary lacks the financial sophistication to preserve and manage a large windfall, many annuity specialists will ensure that the client specifies whether one, some, or all of the beneficiaries must receive their share of the annuity proceeds in the form of a series of periodic payments over a specified period of time.

Annuities are subject to income taxes at the time of the client’s death, and, if client assets are considerable, they may be subject to estate taxes as well. Aspiring annuity specialists will learn in annuity school that if clients want to maximize what their clients’ beneficiaries will receive, they should consider using some of their annuity money to purchase life insurance. Estate planning and will preparation are important for both the specialist and his or her client. Annuities play a large role in estate planning as well as will preparation, and certified specialists are needed to ensure the process runs smoothly for everyone involved.

About the Author: Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about

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