Harry, a retired IT engineer, would like to help his two children and three grandchildren. He intends to leave them his apartment in Boston and his second home near Miami, but would also like to pass on to them today part of the savings he has accumulated. He is keen that it is done intelligently, to avoid one of them doing something silly with the money, which is the fruit of a whole life of work and saving!
With the $170 000 that he wants to put into this project, Harry will give each of his grandchildren an account credited with $15 000. This means that in 20 years, Matthew, Michael and Julia will be provided with an annuity of $805 a month, which is quite something when you’re a student! The rest of his capital, $125 000, is credited to his account and is placed in capitalisation mode. When he dies, the beneficiaries that he has chosen will receive their annuity entitlements. So, if he were to die in 15 years, the four named beneficiaries would inherit the sums of: $1 874 a month for his partner Sonia, $1 041 a month for his two children Paul and Claire, and $2 610 every year for the Red Cross, a charity to which he is particularly attached.
With no entry fees, management fees or inheritance taxes, Harry has therefore been able to freely pass on part of his savings, which will directly benefit his loved ones, for life, starting today.
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