Strategy guide

Wealth transfer

Make a difference that lasts for years to come Efficient strategies for maximizing your legacy

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Wealth transfer

Before we get started

Nationwide® and its representatives do not give legal or tax advice, so talk with your legal or tax advisor for answers to your specific questions.

Also, please remember that the guarantees and protections discussed in this brochure are subject to the claims-paying ability of Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company.

Be sure to choose a product that meets long-term life insurance needs, especially if personal situations change — for example, marriage, birth of a child or job promotion. Weigh the costs of the policy, and understand that life insurance has fees and charges that vary with sex, health, age and tobacco use. Riders that customize a policy to fit individual needs usually carry an additional charge.

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Wealth transfer

Wealth transfer strategies can be used to help change assets you don’t need for retirement income into a more tax-efficient inheritance for the people and organizations you care about.

These strategies can potentially increase the amount of wealth you pass on, provide an income tax-free death benefit for your beneficiaries and may even enable you to avoid probate and federal estate taxes, if structured properly.

What’s inside?

Who should consider wealth transfer strategies? 2

How do they work? 3

Meet Jerry and Sue 4

Next steps 5

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Wealth transfer

These strategies are generally a good fit for individuals or couples who:

• Are over age 59½

• Have ample income for retirement and emergency funds

• Want to maximize unused assets as a legacy to pass on to their beneficiaries

• Are in good health, or have a spouse who is in good health

Who should consider wealth transfer strategies?

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Wealth transfer

How do they work? 1. Identify any assets you won’t need for retirement income.

2. Create a stream of income from the unneeded asset by annuitization or through a systematic withdrawal plan. This may greatly reduce or even eliminate the asset from the taxable estate at death.

3. Leverage the income stream by using it to purchase life insurance. The amount of the life insurance death benefit will often be greater than the payments you made into the policy. What’s more, the death benefit can pass to your heirs income tax free, allowing you to increase the value you pass on.

If, after reviewing your estate, your attorney thinks it will help your particular situation, you can also take the assets and move them to an irrevocable life insurance trust (ILIT). Doing this will remove the assets from your taxable estate and can add even more value for your family.

Methods available for funding these strategies include:

• Systematic withdrawals or lump-sum deposits from an existing asset

• Annuitization payments from a current deferred annuity contract

• Required minimum distributions from IRAs or qualified retirement plans

• Savings accounts

• Certificates of deposit (CD)

Wealth transfer

Meet Jerry and Sue

Jerry and Sue are on the verge of retirement. Their children are out of the house, so they spend their time volunteering and visiting their grandchildren. They’ve made wise decisions over the years on how to manage their finances and feel they’ll be able to live comfortably in retirement, no matter how long it lasts.

So when their annual insurance review rolls around, they’re not sure they need to go — after all, they have what they need to live on and their children can have the rest. But their insurance professional explains that the assets that helped them generate their wealth may not be the best ones for passing that wealth on to the next generation.

He helps them identify an annuity they won’t need for income in retirement. Then he shows them how they can use the income stream from it to purchase a life insurance policy with a potentially larger death benefit. The life insurance policy will pay an income tax-free death benefit directly to their heirs (in this case, their children) and can even be free of federal estate taxes, if they structure it the right way.

By having an efficient wealth transfer strategy in place, Jerry and Sue can help ensure that their wealth goes to their family instead of the IRS.

All of the characters in this story are fictitious and are meant to represent typical individuals in typical life situations. The information is designed to demonstrate one possible solution to a complex problem. You should work carefully with your insurance or investment professional to determine a solution that meets your specific needs and objectives.

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Wealth transfer

Next stepsIf you’re looking for opportunities to increase the value you pass on to the people and organizations that matter most to you, talk to your insurance or investment professional about a strategy for transferring wealth.

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This material is not a recommendation to buy, sell, hold or roll over any asset, adopt a financial strategy or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Clients should work with their financial professional to discuss their specific situation.

Products are issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio.

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LAM-0201AO.5 (11/17)

• Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value