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 1 of a 2 part article.
Consider passing along a sentimental gift for each grandchild. This might be a treasured book you shared, jewelry that has been passed down in your family, or a set of tools that you used together.
You can make provisions for sentimental gifts in your will or trust or pass such gifts along while you are still alive so can see your grandchildren enjoy them.
Consider setting up a 529 Plan or contributing to a plan already in existence. The assets in 529 plans are used to pay for college expenses. The assets grow tax deferred and are distributed tax free.
You can superfund 529 plans if you wish. This means that you can contribute 5 years worth of your applicable credit amount at one time, without incurring gift tax or using any of your unified credit amount.
For example, the applicable credit amount is currently $13,000. You can donate $13,000 x 5 or $65,000 at one time. But then you’d have to wait another 5 years to make further applicable credit amount gifts.
Consider writing your thoughts about your grandchild down in a letter. Some grandparents choose to make a video, scrapbook, or photo album for the grandchildren.
One grandfather made a notebook detailing his trip to Antarctica for each of his 6 grandchildren. The adventure was an important part of him and took place before his grandchildren were born. It helped the grandchildren understand him better and see what he was like when he was young.
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 2 of this 2 part article.