If you have assets you want to pass on to your children, free of gift and estate tax, consider a private annuity. Private annuities must be unsecured so they’re generally limited to intra-family transactions. In a typical deal, the older family member transfers assets to a younger relative, who promises to pay a certain amount each year, set by IRS tables. Payments will continue as long as the original owner is alive. If you’re 65, for example, you might transfer investment property worth $400,000 to your son for $50,000 per year. You get retirement income, your son gets the property, and there are no gift or estate tax consequences if the valuation is accurate. Private annuities generally work best if the original owner is in poor health and therefore unlikely to reach his or her life expectancy. (In that case, relatively few payments will be made.)