Are the Grandchildren in Your Will or Trust?
We all wish to pass on hard-earned wealth to our offspring. With grandkids, especially, we often share a special bond that makes us want to provide well for their future. Do you have the proper precautions in place for these dreams to become reality? If you’re planning to include the grandchildren in your will or trust, here are five potential dangers to watch for, and ways you can avoid them.
No age stipulation
We have no idea how old the grandchildren will be when we die. If they are under 18 or financially immature when you pass on, they could receive a large inheritance before they’re prepared for it. This invites conflict, confusion, and waste.
Avoiding this pitfall: Create a long-term trust for your grandchildren that provides supervision, regardless of their age when you pass away.
Too much, too soon
Even if your grandkids are legally old enough to receive an inheritance, the inheritance could still be quickly squandered. What if they haven’t learned to properly handle large sums of money?
Avoiding this pitfall: Outright or lump-sum distributions are usually not advisable. Luckily, there are many options available. From staggered distributions, to leaving their inheritance in a lifetime, “beneficiary-controlled” trust, Sundance Law can help you set a plan. Let an experienced estate planning attorney help you decide the best way to leave your assets.
No mention of intent
You can hope your grandchildren are capable enough to handle their inheritance in a way you’d wish for them. But if you have specific intentions for how you’d like that inheritance spent, it needs to be communicated. Perhaps the money was meant to put them through college, buy them a house, help them start a business, or something else entirely. You cannot realistically expect it to happen if it’s not specified in your will or trust.
Avoiding this pitfall: Stipulate specific things or activities that the money should be used for in your estate plan. Clarify your intentions and wishes.
Money can make people act in unusual ways. If there is any ambiguity in your will or trust as to how much you’re leaving each grandchild, or in what capacity you wish to leave it, greedy relatives could contest your plan.
Avoiding this pitfall: Be crystal clear in every detail concerning your grandchildren’s inheritance. At Sundance Law, we can help you clarify any ambiguous points in your will or trust.
Touching your retirement
Many misguided grandparents make the mistake of giving away some or all of their retirement money to the kids or grandkids, especially when a family member is going through some sort of financial crisis. Trying to get the money back when you need it, can be difficult or impossible.
Avoiding this pitfall: Resist the temptation to jeopardize your future by trying to “fix things” for your grandchildren. If you want to help them now, consider giving them part of their inheritance in advance, or setting up a trust for them. Make sure any lifetime offering you make doesn’t leave you high and dry.
If you’re planning to put your grandchildren in your will or trust, Sundance Law is here to help with every detail you should consider. Contact us today to explore your options, and protect those you love most.
Sundance Law Group focuses on securing your future, family, and business through estate and business planning, including wills, trusts, powers of attorney, trust administration, and business planning contracts and agreements. Our offices are located in Highland and Lehi, and we serve clients in Utah and Salt Lake Counties. You can contact us by phone 801.980.3401 or e-mail email@example.com.