Often clients comment that they know why they had children when the grandchildren arrive. When a grandchild is specifically named in your will or trust, the honor is great. Typically, grandchildren are overlooked.
Because we know that you dearly love your grandchildren, we’re providing some tips on how to include your grandchildren in your estate planning. This is part 2 of a 2 part article.
Special Opportunity Gifts
Some grandparents enjoying setting up a trust for their grandchildren that can be used for special opportunities such as a class trip to France, astronaut camp, music lessons, buying a first house, or college tuition.
Cash is always a popular gift. If you would like to give significant cash assets consider doing so in protected trust provided in your own trust.
These protected trust ensure that the cash assets are fully available for your grandchildren as you instruct, but are not attachable by your grandchildren’s creditors.
Examples of creditors who won’t be able to get at your grandchildren’s trust assets include a divorcing spouse, bankruptcy court, or someone who is suing your grandchildren because of a car accident, slip and fall, or malpractice.
Gifts of Appreciated Assets
Because your grandchildren will receive a full step up in basis of your assets at your death, it may be wise to wait until then to transfer these assets. If you want to give assets during your lifetime, give cash or assets that aren’t highly appreciated.
Getting a full step up in basis at your death means that your grandchildren will have reduced capital gains taxes.
If you have questions about how to include your grandchildren in your estate plan, consult with a qualified estate planning attorney and please be sure to check out part 1 of this 2 part article.