Leaving an inheritance for grandchildren is popular among grandparents. Of course, they all have their own reason for leaving the inheritance for the grandkids. If you’re planning the same and want to leave a part of the estate or a certain amount of money, then you’ll have to plan in a right way.
5 Tips to know before leaving an inheritance for grandchildren
It’s quite a normal emotion for grandparents to see their grandkids successful when they aren’t with them. Sometimes, your grandson/daughter is too young to understand its value. So, you’ve to leave the inheritance in a proper way so that they’ll get the reward at their right age and can use the money in a right way. So, this article is must read for all grandparents to know some vital points of this subject.
1. Appoint an expert to get help
Try to hire a certified financial planner who has experience in estate planning. An efficient financial planner, tax practitioner can give you proper advice while leaving inheritance to grandchildren. Ask your close relative or friend to recommend such professional who can help you for this work. Remember, financial matters are quite complicated, so seeking help from an expert can make the whole process smooth and error free.
2. Make sure your grandchild’s age is perfect
Leaving an inheritance or a large amount of money to a 18-year-old can create a big impact both emotionally and financially. The whole thing can derail your grandchildren from their own ability to do something. As per the experts, every grandparent should judge his/her grandchildren before giving a big amount of money or an estate. According to them, try to give a certain amount of money to your grandchildren and observe how they handle money. If they handle money responsively then it's fine. But, if they start living a lavish life (buying an expensive car, making a long tour etc) after getting a big amount as a reward, then rethink about the subject.
3. Set up a trust
If you’re planning to leave such big amount of money $100,000 even more, then don’t leave the money directly to the minors. Set up a trust. You need to contact your local county bar association to know the name and details of an estate planning lawyer. The lawyer may advise you to distribute in one-third when the kids turn into their right age.
Read more - How does a trust work?
4. Communication is the key
Try to talk with your grandchildren about your whole professional life. For instance, how you earn the money, from where the whole property came, how many years you’ve worked to achieve it. Try to share your feelings and explain your expectation from them. Try to let them know about investing and philanthropy. This type of discussion will grow a responsibility in them and they’ll understand its value.
5. Mention in a clear language
Jonathan Forster, an estate-planning attorney and partner at Los Angeles-based Weinstock, Manion, Reisman, Shore & Neumann, said,“it’s critical to be specific as possible in your will or living trust. Ambiguous language or instructions are susceptible to attack.” He said, don’t just leave the money to your grandchildren. Try to specify their names and how much money you want to leave for them. Try to mention your wishes clearly in the will.
Bottom line
Leaving inheritance for grandchildren is quite complicated. There’s a specific law on this subject. So, always talk to the estate planning lawyer in order to make the whole process perfect. There are a number of issues you need to decide beforehand, so it’s advisable to proceed with the help of a specialist.
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