Milevsky’s Tales From Annuity History: A Most Curious Will(iam)

Readers familiar with the history of insurance—or Victorian crime novels—might recognize this arrangement as a tontine, named after the famed Italian entrepreneur Lorenzo Tonti (1602–1684), which is a financial scheme that has enthralled me of late.

In a tontine annuity, a fixed, predictable, known amount of income is allocated among survivors, and the last remaining member of the pool receives all the income until he or she dies. This is exactly how Houghton structured his will. But, as you might note from the dates at the very beginning, Houghton wrote his most peculiar will and last testament in 1581. He initiated a tontine scheme among his 11 servants almost a century before Tonti "invented" and named tontines in the mid-1650s. Perhaps this is yet another example of Stigler's Law of Eponymy stating that no scientific discovery is named after its original discoverer.

Surprisingly, private tontine schemes were quite prevalent in England well before Tonti ever thought of naming them. They were also used by governments in England during the 17th and 18th centuries as a way of financing the national debt, but they weren't called tontines until many years later. They were referred to in official documents as "life annuities with group survivorship benefits."

But the bigger surprise lies in the actual beneficiaries to Houghton's will in 1581, and in particular one of the 11 servants named, curiously, Will or William. He was one of the younger ones, being 17 years of age, and was quite fortunate to benefit from his master's largesse of 40 shillings a year for the rest of his life. From the will it appears that William was employed as an entertainer, musician and actor. It is not clear whether he was part of the acting troupe that Houghton supported, or whether William entertained other employees and servants. A pension of 40 shillings a year for life was extremely generous for a 17 year-old, so one might therefore speculate that he was quite the entertainer.

What we do know for certain was his last name. It was Shakeshaft. This makes him one William Shakeshaft and—hold on now—the person most historians now believe was William Shakespeare.

The surname Shakeshaft was William's paternal grandfather's name, and a common variant he used. Much evidence suggests that Shakespeare spent part of his teenage years entertaining in the household of Alexander Houghton, after his early childhood at Stratford-upon-Avon. Indeed, his connection to Lancashire has been linked to his Catholic and popish sympathies, a subject of much controversy in his plays.

Soon after his employer died in 1581—and the will's generosity was put into action—William married the by-then pregnant Anne Hathaway in 1582, had twins, moved to London and the rest, as they say, is history.

Let's pause and enjoy this for a moment. One of the first documented tontine annuity schemes in history involved the greatest playwright and author in English history. It is not, therefore, unreasonable to assume that the income from the tontine annuity helped to finance the creation of Hamlet, Macbeth and my personal favorite, The Merchant of Venice.

William Shakespeare died at his home in Stratford-upon-Avon at the age of 52, having enjoyed his income for almost 35 years, quite possibly outliving the other 10 servants who were much older than him in 1581, perhaps even winning the tontine by the time of his death in 1616.

So, next time your clients question your annuity allocations and recommendations—or perhaps inquire about your commission from the annuity—you can now reference a literary deity: "For I can raise no money by vile means," said Brutus in Julius Caesar.