Congratulations on the new addition to your family! Like all grandparents, you want to do everything you can to provide support to your grandchild and set them up for future success. Including them in your estate plan is one way of doing that. You can make sure that they will benefit from everything you have earned from a lifetime of hard work, and you can take measures to see that they get that benefit throughout their lives.
It’s possible to revise your estate plan in California as circumstances change. The addition of a new family member like a grandchild is a great reason to revisit your estate plan, or to create a new estate plan if you haven’t done so already. Even if you haven’t added a new family member, you should regularly check your will, trust and other estate planning documents to make sure you still agree with your original choices.
Should I Name My Grandchildren As Beneficiaries Or Their Parents?
Many people simply name their children as beneficiaries in their estate plan. That is okay, and you can express to your children your wish that your new grandchild shares in your wealth when it is time for that wealth to be passed on. However, there are situations in which it makes sense to directly name grandchildren as beneficiaries. Perhaps the parents have passed away, or are not in the picture. Whatever the reason, you do have the option of naming your grandchildren as beneficiaries in your estate plan.
One concern you may have is that you want your assets to benefit your grandchildren throughout their lifetimes. Keep in mind that your assets do not have to be passed on all at once. Trusts are important estate planning tools because they offer the option of doling out money to the beneficiary over time, so they can benefit from your wealth for years to come. Perhaps you only have a simple will at this point, and now it might make sense to add a trust to your estate plan to see that assets are passed on to your grandchildren in the manner that you would prefer.
Letting Your Grandchild Benefit From Your Estate During Your Lifetime
In addition to or instead of creating estate planning mechanisms that allow your grandchild an inheritance after you pass away, you can give to your grandchild while you are still alive. That might include designing a trust so that it provides payments to grandchildren at certain ages, setting up a 529 College Savings Account for your grandchild or just gifting cash to your grandchildren every year.
Some of these options may be accomplished without having to update your core estate plan, while others may require revision. Some have different tax consequences than others. An experienced estate planning lawyer can review your goals, your situation, your existing estate planning documents and guide you toward the right approach to providing wealth to your grandchildren.