Grandchildren can provide a lot of joy and happiness in your golden years. If there is anything more powerful and affirming than watching your children succeed, it is watching your grandchildren develop into their own unique people.
You may want to give each of your grandchildren some meaningful inheritance, but doing so successfully may require some extra planning. Many grandparents find that using a trust is the easiest way to leave something behind for their grandchildren.
A trust means your children won’t have control of the inheritance first
Perhaps the biggest issue with just leaving inheritance has for your grandchildren is the possibility that you will die while they are still young. Minor children will not receive an inheritance. Instead, their parents well manage those assets for them until they turn 18.
Your children could potentially use up everything that you said aside for the grandchildren before they ever become adults if you die before your grandchildren are old enough.
A trust makes it harder for other family members to challenge your wishes
Especially if you chose to disinherit someone or diminish what you leave to your children in favor of leaving more for the grandchildren, some of your loved ones may take issue with your decisions.
Family members need actual grounds to challenge your estate plan, but people can sometimes fabricate claims of fraud, undue influence or lack of testamentary capacity just to try to get a larger share of someone’s estate. Moving major assets into a trust will make it harder for people to challenge your wishes about what happens to those assets when you die.
A trust will limit the beneficiary use of assets
Do you have a grandchild with special needs who might rely on Medicaid or other benefits for their cost of living expenses? Do you want to make sure that your grandchildren only use their inheritance for certain expenses, like college tuition, a downpayment on a house or other important costs?
When you create a trust, you can put conditions on the distribution of assets that the trustee can enforce. From limiting how much someone can withdraw so that they don’t become ineligible for state benefits to only allowing certain kinds of expenses, you can maintain control about the use of your legacy even after you die.
Thinking about what you hope to achieve by leaving property for your grandchildren to make it easier for you to create a trust as part of your comprehensive estate plan.