When crafting an estate plan that takes into account grandchildren, there is some extra care that must be taken to ensure that your loved ones are cared for without creating extra difficulty for them in the long run. Because grandchildren are often minors, and may still be minors when they become receiving beneficiaries of your estate, some extra steps must be taken to make sure that your wishes are fulfilled without incurring extra fines or violating laws governing ownership by minors.
Depending on the size of the gift you wish to leave to your grandchild, you may want to pursue a couple of different avenues of gifting. For relatively small monetary gifts, it is possible to place the funds in a Child Uniform Transfer to Minors Act account or a College Education Savings Plan, provided that the funds are meant to be used while the grandchild is still relatively young.
However, for more complex assets or monetary gifts that exceed about $50,000, you will most likely need to consider placing these assets within a trust to ensure the most effective transfer. Among the advantages Californians can expect from a trust is the ability for any trust to last for entire life of the recipient, or up to 90 years. Furthermore, a trust can be set up to distribute funds in increments over time, or use any number of other safeguards that will keep the gift from being diminished by creditors or wasteful spending habits.
If you are considering setting up a trust or other estate planning tool to provide a gift for your grandchild, it is wise to enlist the assistance of an attorney you can trust. An experienced attorney can help you establish exactly the document you need to express your wishes and provide for the ones you love for years after you have passed on.
Source: Lake County News, "Estate Planning: Gifts and inheritance for grandchildren require planning," Dennis Fordham, Jan. 07, 2017