Estate Planning Basics: Leaving an Inheritance or Gift to Grandchildren
When children grow up and start their own families, grandparents may want to consider a reevaluation of their current estate plan to ensure they have made provisions for their grandchildren. This may be especially critical if there are any special circumstances, concerns, or issues within your family. Learn more about leaving an inheritance for grandchildren with help from the following information.
Making Provisions for Minor Grandchildren
Leaving behind a gift or inheritance to a minor child (those under the age of 18) is a fairly complex matter. You cannot simply leave them the assets and hope it all works out. Instead, you must appoint a guardian to manage and oversee the assets until the child becomes of age, or until they are able to manage the money on their own.
Smaller gifts are somewhat easier to plan for since you can often appoint a trusted adult or deposit the money directly into a College Education Savings Plan. This is generally the most cost-effective solution for smaller monetary gifts (typically less than $50,000). Just be sure to discuss this option with your attorney before putting it into place, especially if you have concerns or special circumstances (i.e. no viable options for a trusted adult).
Larger gifts and real property gifts typically require a trust - a legal manager of the assets and/or property. This means more expense, but you can often use the same trust for all grandchildren. Further, you can request that the trust continue for the beneficiary’s lifetime, and you can even set up alternative beneficiaries, should the primary beneficiary pass away before they receive their last payment.
Making Provisions for Adult Grandchildren
Adults can receive their inheritance outright, but this may not always be the most favorable option. Those that cannot manage money well, have a lot of debt, or suffer from special needs or substance abuse may still need a trust to ensure the inheritance is not squandered, taken by creditors, or otherwise lost. Further, you will need to carefully consider potential tax burdens of the gift you leave behind. Your estate planning attorney can help you examine your options.
Contact Our Fremont Estate Planning Attorney
Do not attempt to handle the complexities of estate planning alone. Instead, contact the Law Offices of Louis J. Willett and obtain the assistance and guidance you deserve. We take the time to understand your situation and offer creative solutions to suit your needs. Learn more about how our Fremont estate planning lawyer can assist you. Call 510-791-2244 and schedule a free consultation today.