Can Estate Planning Help Me Provide For My Grandchildren?
There are many reasons you may need to provide and plan for the well-being of your grandchildren. Whether you’ve taken on the part of primary parent, or simply want to ensure that your grandchildren receive your assets, there are estate planning strategies at your disposal.
What Role Do Wills, HIPAA Forms, And Life Insurance Policies Play?
If you are the primary caretaker of your grandchildren, you can use a will to name a guardian for them in the event that you pass away while they are still minors.
You might choose to complete a HIPAA form providing trusted individuals access to your grandchildren’s medical records. This would help protect the interests of the grandchildren in the event of an emergency, or your unexpected absence.
Another common way to protect your grandchildren is by making them the beneficiary on a life insurance policy so that their financial needs would be taken care of should you pass away while they are still minors.
Can I Just Gift My Grandchildren With Money Or Other Valuables?
If your grandchildren are still minors, then gifting them with your assets will have to be done in a particular way. This is because minors are not allowed direction ownership of assets in any form, whether it’s cash, property, investments, etc.
If there is already a guardian appointed to the grandchildren’s estate, then that guardian can receive and manage the assets on behalf of the grandchildren until they reach the age of 18.
Other alternatives include having the court transfer the assets to a special needs trust for the grandchildren, to a custodian of a minor grandchildren’s bank account, or to a court-approved trustee.
What Is A Uniform Transfer To Minors Act (UTMA) Account?
For many, options that do not involve the appointment of a guardian are appealing simply because they avoid the high cost of court proceedings.
If there is no guardian appointed and you wish not to have one appointed, you may be able to open a Uniform Transfer to Minors Act account. This would not only allow your grandchildren to receive money and/or other gifts without the involvement of a guardian or trustee, but also may eliminate tax consequences (up to a certain limit) while your grandchildren are minors.
Would I Have To Be The Person In Charge Of The UTMA Account?
If you want to choose the UTMA account route but do not want to manage the UTMA account yourself, you can choose to appoint a trusted individual to act as custodian. This individual would be responsible for managing the property on behalf of your grandchildren until they turn 18 years old.
Are Trusts Useful When It Comes To Estate Planning For Grandchildren?
Trusts are used frequently by both parents and grandparents of minors, as they come with a number of advantages. For instance, creating a trust would allow you (the trustor who establishes and funds the trust) to dictate how and when your grandchildren would receive the assets in the trust.
You might want the funds to be saved strictly for the purposes of higher education, or decide that the funds should only be given to your grandchildren once they achieve certain goals, like a professional license.
A trust would also give you the freedom to determine the age at which your grandchildren receive the assets in the trust. You might decide that the assets be distributed at certain time intervals, such as 10 percent of the assets every five years over the course of a grandchild’s life.
Yet another benefit of creating a trust is that it can be used to hold real property, such as a home, equipment, or land.
The trust can be designed to last for as long as you choose, and can keep costs low by managing the assets for all of your grandchildren—not just one.
What Other Benefits Come With A Trust?
- For each trust that you create for each grandchild, you can add $15,000 without worrying about a gift tax
- You (or the appointed trustee) maintains control of the assets in the trust for as long as you wish
- If you deposit money in the trust, the trust itself will pay the taxes on it (not you personally)
Should The Trust For My Grandchildren Include Certain Provisions?
You can choose from a variety of trust provisions to further protect your grandchildren, such as a spendthrift provision that would protect the assets from the reach of creditors, or from a problem that affects the grandchild, like an addiction to gambling or drugs.
Estate Planning Attorney In Round Rock, TX
At first glance, estate planning for grandchildren can seem like an overwhelming task. And while it is true that there is a lot of information to unpack—information that might be brand-new to you—there are few things better than peace of mind in knowing that you have done everything in your power to protect and provide for your grandchildren’s needs.
It is also true that legal help is not far away.
Attorney Gerald Winters of the Winters Law Firm in Round Rock, TX is a highly experienced estate planning attorney whose passion lies in helping others navigate the law, and plan for the future they envision.
He isn’t the type of attorney who will just treat you like another case number; he treats every single one of his clients with the careful attention and compassion that he knows they deserve.
This means that he will truly listen to your needs and work with you, ensuring that you understand all of the options at your disposal and never feel left in the dark.
He will carve out the time necessary to provide you with the highest level of legal representation, and keep in touch with you as time passes to make sure that you are still completely satisfied with the estate plan you have in place.
Don’t wait any longer to plan for the well-being of your loved ones. Call estate planning attorney Gerald Winters at (512) 529-9085.
Call Now For A Consultation