Ask Grandma and Grandpa

Presented by Brian Leising

When you meet with a person who is a grandparent, what photos do you see on their walls? The photos of their children are long gone and the walls are now adorned by their adorable grandchildren. Just try to ask a question about their grandchildren and see if you can get a word in edgewise for the next hour. They love to talk about their grandchildren and would do just about anything for them. If your clients (the parents) are short on cash, ask them about their parents.

Some retirees have more money than they will spend in their lifetime. They may even have funds already earmarked for future generations. This provides you with a great opportunity, you just need to ask. Here are a few specific items you should bring up:

Do the grandparents have IRA’s or qualified plans with benefits larger than they will need for retirement income?

Are they taking required minimum distributions only to re-invest them and pay more taxes on that income?

Do they have CD’s, mutual funds or annuities earmarked for their heirs?

By taking this money and placing it into a life insurance policy, they could shelter the money so the income is not included on their tax return. If structured properly, it could also provide tax free loans that may be used for any purpose, including college tuition. The policy also produces a legacy at death.

In other cases, you may find the grandparents are able to fund a policy on the lives of the parents. The death benefit, if needed, would provide funding for the children and the cash value could be tapped for any purpose, including college tuition.