Client wants guaranteed DB for 30 year old daughter with Cerebral Palsy. Trust is set up. Has 50k to invest for her. They want to give her trust the funds now, with Great Am Inheritance Builder 9% rider. I'm thinking why not just have the Trust as beneficiary on the FIA instead. Thoughts?
Special Needs Trust
- Thread starter jmhalvo
- Start date
- 10,313
If its in a special needs trust then Im pretty sure that the trust will be the Bene anyway.
Or do you mean keep the IA out of the trust and just make the trust the Bene of an individually owned IA? If so, that eliminates all of the benefits of a special needs trust....
If he wants a DB then why not try Life Insurance???
CP is not an auto decline.... it all depends on the severity of it....
A GUL would be much better in this situation if she can get approved.... maybe even an IUL...
- 11,266
The Special Needs trust is for when the parents pass... not the child. The child's CP isn't a factor here, but to shelter various assets for when the parents pass, the child isn't "dis-inherited" from government social benefit programs.
The best way to fund a special needs trust IS life insurance on the parents.
Have you done a full fact-find?
Can they commit to an ongoing premium commitment? Or is this $50,000 all they have (right now) for funding the special needs trust?
Perhaps a single premium life insurance policy?
As far as how the trust works and how to set up the ownership/beneficiary... I'm sorry but I'm really rusty on that one right now. I would call your advanced underwriter team at whatever company you're working with. It may also be worth a call to the client's attorney as well.
The best way to fund a special needs trust IS life insurance on the parents.
Have you done a full fact-find?
Can they commit to an ongoing premium commitment? Or is this $50,000 all they have (right now) for funding the special needs trust?
Perhaps a single premium life insurance policy?
As far as how the trust works and how to set up the ownership/beneficiary... I'm sorry but I'm really rusty on that one right now. I would call your advanced underwriter team at whatever company you're working with. It may also be worth a call to the client's attorney as well.
- 15,041
What DHK said. The point is to provide for the child if and then the parents pass. Unless the parents are uninsurable, there is no reason to use an annuity, it should be life insurance on the parents.
Work with an attorney about setting up the trust, they can handle how it needs to be done. As the insurance agent, you just need to make sure the trust is the owner and beneficiary. Also, you'll need to know who the trustee is so they can sign on behalf of the trust.
Work with an attorney about setting up the trust, they can handle how it needs to be done. As the insurance agent, you just need to make sure the trust is the owner and beneficiary. Also, you'll need to know who the trustee is so they can sign on behalf of the trust.
- Thread starter
- #5
trust is done. The parent will be annuitant if I wasn't clear. They also want some liquidity, thought 10% about right. Adv markets suggests have trust own FIA as well as be benefi
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