Leaving the Endowment Policy in the Care of Kids or Company By Christina M Thomas

Now that you've set up the endowment policy to fund the future of the summer house you've bought for your children (or yourself, for that matter), other somewhat thorny questions remain. Among them: who will take care of the fund, itself? Are your kids responsible enough to make sure everything stays on the level? Are they much too busy with the rigors of their own lives and families to be burdened by this additional responsibility? It may at first seem like a minor question; but, the future of your established endowment depends on it. Luckily, there are several options available...

Endowment Management

One of the better material ways to leave a mark for one's offspring is to establish an endowment, usually for a vacation retreat of some sort (log cabin, summer home, winter lodge, etc). Securing enough money for the principle, such that most or all of the future expenses of such a gift will be taken care of, is often a lasting source of appreciation between parent and kid(s), as well as future generations. Once the money is secured, however, there is often one crucial consideration that a parent must make upon establishing an endowment, and it is second only to the amount of money intended to be left behind: who should manage the endowment policy. Unless responsibility is to be delegated to a child or children, there are really only two options - either the insurance company from which the endowment was procured, or an external manager (as in a trust company) independent of the endowment-assigning-company altogether. There are good reasons for doing either and these are of course dependent on the parent's ultimate wishes for the management of the endowment.

Trust Company Management

In this scenario of endowment policy management, the policy is put into the hands of a professional investment manager, specializing in trust funds. Performance is secured by the fact that the "leasing" company (the company that originally drafted the endowment policy) doesn't just give the policy away; the trust company is merely hired, and can be fired for poor performance. This option is usually a good one for endowment policy-establishers who have questions as to the responsibility of their heirs, or even of the original company, if they don't actually specialize in managing endowments, just in selling them.

Of course, distrusting ones heirs isn't the only good reason to outsource the management of an endowment policy; it can also be done simply to ease the responsibility of annual management of the endowment, and all of the related investment information (stocks rising and falling, etc). In the scenario of trust-company-management, they will even take care of the associated taxes, reporting them back to the original company, which may or may not (depending on the terms of the original agreement) then forward the necessary tax-forms to the endowment policy-holder.

The other alternative is to simply keep the endowment policy with the original company from which it was purchased. Usually in this case, however, a lot more hands-on work and management is required from the beneficiaries, who can delegate amongst themselves managers for the endowment policy.

Christina thinks that deciding whether to leave your visa black card endowment in the care of your offspring or a trust company can be nearly as difficult as establishing it in the first place. One should speak to an experienced insurance agent, one well-versed in the area of endowments, specifically, and measure all the options. Article Source: http://EzineArticles.com/expert/Christina_M_Thomas/1061406