Giving money and assets to your grandchildren can provide more than just a nice start in life for your family. When choosing what will happen to your assets in the future, it’s crucial to go past emotions, just as it is with any other real estate transaction, and to instead properly document your wishes with a clear and legal estate plan.
Many circumstances will influence your estate planning selections, particularly if you remarried and your spouse or partner has children, or if one of your grown children is in a similar situation. The choice of whether or not to provide for your stepchildren or step-grandchildren in your will or trust is a significant and often emotional one. A clearly drafted estate plan may guarantee that your assets are allocated in a way that benefits both you and your family.
Estate Planning for Grandchildren & College
If you have grandchildren and want to make sure they get a share of your inheritance without having to go through their parents, you’ll need to take a few steps. Leaving your whole fortune to your children may, sadly, result in the assets being drained before your grandchildren have an opportunity to inherit anything. It is difficult to foretell the future, but planning for it helps ensure your estate is divided in a manner that you approve.
Many grandparents want to start investing in their grandchildren’s futures as soon as possible, and some even wish to leave part of their possessions to their grandkids before their death. Many grandparents prefer to employ education savings tools, which allow you to put money aside for your grandchildren’s college tuition and help them attend their preferred school.
A grandparent can give to a 529 Plan for the kid’s education in addition to gifts placed in trust for the youngster. These plans allow parents and grandparents to put money aside for their children’s education, and the money grows tax-free while in the plan. The 529 Plan allows grandparents to contribute to their grandchildren’s education.
A Will is the first step in estate planning.
A will outlines your wishes for how your assets should be dispersed when you die, as well as who must be the guardian of your minor children and other critical decisions. A will can also help to avoid family strife and speed up the probate procedure, which is the legal process of dispersing property to heirs after a person’s death.
Don’t have a will yet? Oxner Legha offers complete estate planning packages that can ensure your assets are optimized to go through probate with minimal costs assumed by your heirs.
If you pass away intestate (without a will), Texas law will identify your heirs based on close blood relatives. All of your offspring, even those from previous partnerships, are heirs. Your significant other, pals, and stepchildren are not considered heirs. Unless the parent (your adult kid) dies before you, your grandchild will not inherit from you. The probate court must describe your property as real estate or personal, communal or separate, in addition to identifying heirs. Intestacy is a time-consuming and costly process, with fees and court costs deducted from your assets. While a will does not eliminate the need for probate, it does guarantee that your property is distributed according to your preferences with little judicial intervention.
Leaving a Gift
Minors, however, are unable to acquire assets as gifts or inheritances. This isn’t to say that you can’t leave them something. Instead, put a clause in your estate plan that establishes a trust for the younger grandchild. You can leave assets to your grandchild through that trust, but you can also select someone to handle the assets until the kid reaches a particular age that you specify. The trustee can spend the assets for your grandchild’s health, support, education, and maintenance while they are retained in the trust. When the kid reaches the specified age, they can gather the remaining assets and utilize them as they see fit.
Revocable Living Trust
A revocable living trust is a trust that can be changed at any time. The best option for most individuals is to put their residence into a Trust while they are still living and identify the beneficiary in the Trust form. If your children have said that they do not wish to inherit the house, you might direct the Trustee to sell the property and distribute the money to your grandchildren after your death.
Death Deed Transfer
The house stays in your name until you die, after which it goes immediately to the specified beneficiary without having to go through Probate. If your successor is already living in the property or if it is the only asset you have to pass on, this might be a viable alternative.
Deed of Lady Bird
While we don’t normally promote standard Life Estates, if you wish to avoid Probate and shield your home from the Medicaid Estate Recovery Program, a Lady Bird Deed may be a suitable choice. All of these alternatives have possible tax and Medicaid eligibility implications, so you should consult with an estate planning expert to determine which option is best for you.
Consult with a Texas Estate Planning Attorney
Grandparents commonly desire to leave part of their belongings to their grandchildren. However, good intentions and bad preparation can result in unforeseen consequences. When someone dies in Texas, there are various legal options for determining who inherits their possessions. There are several inheritance ways to accommodate grandkids, as stated above, and there are numerous aspects to consider when deciding which one is best for you and your family.
If you wish to include your grandchildren specifically and intentionally in your estate planning or simply want to ensure that they are adequately compensated for if they unusually inherit your property, it is critical to review your estate plan with your attorney to ensure that it reflects your wishes and your family’s values. Fortunately, the attorneys at Oxner Legha are well-versed in this area of law and would be pleased to assist you with updating your estate plan.