What Should You Know Before Creating An Estate Plan?
Most clients are familiar with the concept of a “Will.” Less often understood is the concept of a Revocable Living Trust. Whether you use a Will or a Revocable Living Trust, both documents can be key to an effective estate plan, and they lay out your desires for your assets at the time of your death. However, an effective estate plan involves many other considerations:
- Who do you want to be in charge of wrapping up your affairs when you die?
- Who do you want to receive your assets when you die?
- Do you want to leave any gifts to charities when you die?
- Do you have children or grandchildren who have special needs to be considered under your Will?
- Do you have minor children for whom you want to designate guardians if something were to happen to you?
- Do you need to consider strategies for minimizing taxes at your death?
- Should you consider providing asset protection strategies for the beneficiaries of your Will?
- Do you own real estate in another state? If so, special care may need to be given under your Will to that real estate.
The list of considerations when preparing an estate plan can be endless. At Ford + Bergner LLP, our attorneys have assisted literally hundreds of clients work through these decisions to develop appropriate strategies for their Estate Plan. Those plans may involve simply a well-drafted Will, or they may involve more complicated trusts. Whatever your situation, we are ready to help you develop the best estate plan for your particular family.
Estate Planning For Minor Grandchildren Beneficiaries
To many grandparents, their grandchildren are precious. You don’t want to miss a single moment of them growing up, but if you can’t be there, you also want to make sure that they have the best shot at life. For this, your estate can help take care of grandchildren if it is your time, but the issue is that there are special considerations that must be made for those that are still considered minors. So if you are estate planning with your grandchildren in mind, here is what to keep in mind.
Grandchildren Dependent On Their Grandparents
In cases where they are the primary caretakers for their grandchildren, grandparents want to protect those children as if they were their own. This means that in their estate plan, they will want to name a guardian for their grandchildren in their will. They will also want to add in a HIPAA release that will allow the medical records for their grandchildren to be released to another in case of an emergency or if the grandparent is incapacitated.
Finally, it may be wise to invest in life insurance to make sure those minor grandchildren are taken care of in the event of an unexpected passing.
Leaving a Gift to a Minor Child
Unfortunately, minors cannot directly receive any assets as gifts or inheritance. However, this doesn’t mean you cannot leave them anything. Instead, your estate plan should include a provision that creates a trust for the minor grandchild. Through that trust, you can leave assets to your grandchild but also appoint someone to manage the assets until the child reaches a certain age that you designate. While the assets are held in the trust, the trustee can use those assets for your grandchild’s health, support, education, and maintenance. Once the child hits the magic age that you have determined, he or she can collect the remaining assets and use them as they wish.
In addition to gifts left in trust for a grandchild, a grandparent can also contribute to a 529 Plan for the child’s education. These plans allow parents and grandparents to save up money for the child’s education, and while the money is growing in the plan, it is free of any income taxes. The 529 Plan can give a grandparent the ability to feel as though they have contributed to their grandchildren’s education.
If you are a grandparent worried about how your estate will be handled for your grandchildren after you pass on, email us today or call 713-352-0937 to let us help you put plans into place to provide for them.