Whether to include your grandchildren in your will is something to consider. We often meet with grandparents who share a special bond with their grandchildren. They want to see their grandchildren succeed. They see passing on financial stability as a gift to their grandchildren. However, proper precautions need to be taken in order to look out for their grandchildren’s well being.
Include an age stipulation.
When we pass on, we don’t know how old our grandchildren will be. If they are under 18, or if they are financially immature when you die, they could receive a large inheritance before they know how to handle it. The inheritance could be easily wasted. To avoid this, you can create a long-term trust that includes continued management of assets.
Don’t give it all in a lump sum.
The inheritance could be quickly squandered if your grandchildren have not learned how to handle large sums of money, regardless of their age. There are options available, such as staggering their distributions or a “beneficiary controlled” trust. An experienced Estate Planning Attorney can help you decide the best way to leave your assets.
Communicate with them on how you’d like them to use the inheritance.
You may have specific intentions for what you want the inheritance to do for your grandchildren, such as:
- put them through college,
- buy a house, or
- start a business.
You can’t expect it to happen if you don’t communicate it to them in your will or trust. Clarify your intentions and wishes by stipulating specific things or activities that the money should be used for in your will or trust.
Be clear in every detail concerning your grandchildren’s inheritance. Money can make people act in unusual ways. If there is any ambiguity in your will or trust, greedy relatives may try to contest your estate plan. An experienced Estate Planning Attorney can help clarify ambiguous points in your will or trust.
Be aware of your retirement needs.
Your grandchildren may find themselves in a situation in which you would like to help them. You may consider giving them part of their inheritance early or set up a trust for them. It is important to speak with an experienced Estate Planning Attorney prior to doing this and discuss the long- term effects.
The Swenson Law Firm is a Sacramento Estate Planning and Business Law Firm. Contact us to set up a consultation.
If you have not set up an Estate Plan yet, check out our blog on Top Reasons You Should Create an Estate Plan.