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 you also want to make sure that they have the best shot at life if you can’t be there. 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 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, they 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.