Are you thinking about your estate plan? Would you like to leave assets to your grandchildren? Depending on the child's age, doing so may be difficult. After all, you likely don't want to turn vast sums of money over to a young child or even a reckless teenager. On the other hand, though, you may not feel comfortable turning over control of the assets to the child's parents. You may not know whether the parents will, in fact, preserve the assets for the children. Fortunately, there are a few different ways around these issues. Here are three of the best ways to leave money to children:
Set up a trust. A trust is probably the most effective way to leave assets to children after your death because it gives you the chance to spell out exactly when and how the assets are distributed. You can choose to have the money distributed as the child reaches certain ages or if they accomplish specific achievements, like graduating from college or getting married. You can also designate a responsible and trusted advisor to serve as the trustee. He or she manages the assets until the children are eligible to receive them. An experienced estate planning lawyer can help you set up your trust.
Establish the parents or other adults as guardians. In this scenario, the parents become guardians of their child's estate. The parents maintain control over the assets, but they must show proof in court on a regular basis that they are managing the assets for the benefit of the child. If the court feels the parents are acting irresponsibly, the court can remove them as guardians. When the child reaches legal age, the guardianship is removed and they take over control of the assets.
Give them gifts while your alive. Many people don't know that they can give gifts while alive and still have the gifts reduce their estate. If you're worried about the size of your estate, you can start giving it away before you pass away. That way, you can help your grandchildren use the money in an appropriate fashion. You also get to see how the gift benefits them while you're alive. Again, an estate planning lawyer can help you set up a gifting plan that works within the law and avoids a taxable event.
Talk to a lawyer about how you can pass on assets to your grandchildren. They can review your needs and priorities and help you establish a plan.Share