Estate Planning Lawyer
Grandparents love spending time with their grandchildren. If you meet a grandparent, they may break out the photos of their grandchildren, or of the day they spent at the zoo or lake. You and your grandchildren have given each other precious memories, like walking hand in hand to the fishing hole, stopping to skip stones and whistle along the way—just like in the Andy Griffith Show.
But, will you leave them anything other than fading memories when you are gone? Many grandparents want to help their grandchildren and give them a leg up financially. If you choose to leave them something, it is important to do so in the right way. If you simply leave assets to your “grandchildren,” that may be vague. Your children may continue to have children of their own even after your death. You have to ask yourself if you only want to benefit those grandchildren who were alive and whom you knew. Alternatively, you could set aside a pot of money in a trust, appropriately named a “pot trust” to be split at a predetermined time. For example, you could leave money in the trust to be split among your grandchildren when your youngest child reaches age 50. Of course, there is no right answer. Just make sure your wishes are clear. The worst thing you could leave your children and grandchildren is ambiguity.
Giving during your lifetime can make financial sense, especially if you have a large estate. You and your spouse each can give $15,000 per year to each grandchild without reducing the amount you can give estate tax-free at death. So, if you have five grandchildren, you and your spouse each can give $150,000 each year, which is the total of 5 x 2 x $15,000. It may not be appropriate to give that much money outright to your grandchildren, especially if they are young or financially irresponsible. In that case, you can use an irrevocable trust for your grandchildren’s benefit.
Your grandchildren are precious to you. You can show them how important they are through cards and letters and hugs. But, if you also want to help them financially, an experienced estate planning lawyer Palatine, IL offers can help you craft a plan that provides for their future.
Thank you to our friends and contributors at Bott & Associates, LTD. for their insight into estate planning and how a grandparent should plan for the future of their grandchildren.