Jeff Sharp is a Principal with The
SilverStone Group, Inc. and
specializes in wealth accumulation
and distribution strategies for high
net worth individuals. Sharp
received his law degree from
Creighton University in 1985 and
separately received his MBA from
Creighton University’s College of
Business in that same year. A past
Director of the Washington D.C.-
based Association for Life
Underwriting (AALU), Past-President of the Society of
Financial Service Professionals Omaha Chapter and
President-Elect of the Omaha Estate Planning Council, Jeff
was recognized as the 2003 Agent of the Year by the
Omaha Chapter of the National Association of Insurance
and Financial Advisors. Jeff is a Certified Financial
Planner®, Chartered Financial Consultant, and a Chartered
Life Underwriter. Jeff can be reached at (402) 964-5440 or
by email at firstname.lastname@example.org.
THE NEBRASK A LAWYER
As advisors to successful clients, we’re often looking for
financial strategies that will meet unique client objectives.
Around for a long time, Private Annuities deserve a re-
examination as a tool in the advisor’s toolbox in light of
today’s low interest rate environment and the increasing need
by those engaged in high-risk occupations for asset
protection. The purpose of this article is to reacquaint the
reader with the strategy.
What is a Private Annuity?
A Private Annuity is an arrangement between two parties,
typically a parent and a child but sometimes between a
business owner and a key employee. Unlike a commercial
annuity offered by an insurance company, a Private Annuity
keeps the assets used to purchase the annuity in the family.
Also, the Private Annuity transaction permits the use of
non-cash assets to be exchanged in return for the annuity
income. This would include low-basis securities, real estate, or
an interest in a corporation or LLC.
Typically, a parent transfers an asset to the child in return
for an income for life (i.e. the annuity). To avoid any gift
taxes, the promised annuity payments are based u