On September 8th, we have an important holiday to appreciate the special role of grandparents in our families. As a grandparent, you are likely more focused on celebrating your grandchildren and the joy they bring, and you may want to know if there are ways to help secure their future on Grandparent’s Day.
Estate planning offers you many avenues to leave a financial legacy to your grandchildren, and I hope you are interested to learn more about your options. Some of these strategies will depend on the age of your adult children and their financial status, and it can be helpful to let them know of your intentions to prevent misunderstandings.
It is likely you already have some type of estate plan in place (if not, please contact us soon!), and you might need to make some amendments and changes to include your grandchildren. Most of these steps are fairly simple to execute. Here are a few ideas for you:
Wills and Trusts
The most obvious method is to name your grandchildren in your will or trust, along with your children and other heirs or beneficiaries. These can be specific bequests or a percentage allocation of the entire estate value. If you have a trust, you can leave instructions for incremental payments over time, rather than one lump sum. This is an excellent way to ensure that your grandchildren will directly receive a portion of your estate, without relying on their parents to distribute it to them.
Current Cash Gifts
Another strategy is to make current cash gifts to your grandchildren while you are still alive. In 2024, you can gift up to $18,000 per year ($36,000 for married couples) to each grandchild without incurring gift tax. Keep in mind that the aggregate gift amounts do reduce your lifetime estate tax exemption. This does allow you to experience their gratitude now, and witness the real-time impact in their lives, such as paying for education, funding foreign travel or a making a down payment on a home.
Life Insurance
Life insurance policies list specific beneficiaries that can be different than the rest of your estate plan. With this approach you can name one or more grandchildren as beneficiaries, while leaving the rest of your estate plan unchanged. Please note that some estate plans will use an insurance policy to ‘fund’ a trust, so you will want to get legal advice on how to handle any changes.
Questions?
If you are uncertain where to begin, please contact us. At Shoup Legal, we are here to help! Give us a call at (951) 445-4114 so we can help you provide for your grandchildren and secure your legacy.
