For many professionals and established leaders, the drive to create an estate plan often stems from a deep-seated desire to provide for their children’s future. However, building that legacy doesn’t necessarily mean you have to carve out a massive cash gift from your current budget today.
There are several ways to structure your existing assets so you can enjoy your hard-earned wealth now while still ensuring a meaningful impact for the next generation. These strategies often come with helpful tax advantages as well. Let’s explore three creative approaches.
Setting Up a Beneficiary IRA
Both traditional and Roth IRAs allow you to name multiple beneficiaries. Upon your passing, the IRA is divided into separate accounts for each person named.
The beauty of this setup is independence: each beneficiary can manage their portion of the account on their own. They generally have two primary paths: withdrawing the funds within five years or transferring them into an Inherited IRA, which may allow for “stretch” distributions over time.
Naming a Child as an Annuity Beneficiary
Purchasing an annuity and naming your child as the beneficiary ensures they receive a steady income stream after you pass away. Because children have a longer life expectancy, this often results in a more significant, long-term flow of income for them.
One crucial detail for parents of younger children: minors cannot legally own property in their own names. A practical solution is to name a custodian under the Uniform Transfer to Minors Act (UTMA) to manage the benefit on the child’s behalf.
Survivorship Insurance – With a Twist
Survivorship life insurance (often called “second-to-die” insurance) covers two people and pays out only after both have passed. Because the payout is delayed until the second death, the premiums are often more cost-effective than buying two separate individual policies.
For a family with two children, a $1 million survivorship policy effectively secures a $500,000 legacy for each child.
The Twist: As of 2026, the rules require Required Minimum Distributions (RMDs) to begin at age 73. Many retirees find they don’t actually need this extra income for daily expenses. Instead of simply reinvesting that money back into a taxable account, you can use the RMD to pay the insurance premiums. This creates a guaranteed legacy that isn’t tied to the fluctuating value of your remaining estate, giving you the freedom to spend your other savings on the experiences that matter most to you today.
The Bottom Line
These strategies demonstrate that leaving a legacy doesn’t have to mean sacrificing your own retirement lifestyle. A well-crafted estate plan should be flexible enough to take care of you now and your family later.
While these ideas are a great starting point, estate planning is highly personal. I recommend coordinating with your tax and legal professionals to ensure these tools fit your specific need, but a quick conversation with your financial advisor is the best way to get the ball rolling.
