Inheritances often pass to spouses or children. The law theoretically protects the right of inheritance for immediate family members if people die without an estate plan. Close family members inherit everything if an adult dies without a will.
However, individuals can draft custom estate plans based on their personal wishes that include additional beneficiaries or limit the resources that pass to those who might inherit as heirs. People who have enjoyed the transition from parenthood to grandparenthood may want to leave resources for their grandchildren.
In some cases, they may want to skip a generation entirely, as they have already provided practical and financial support for their children. Other times, they want to leave a separate inheritance for their grandchildren in addition to what they leave for their children.
What steps can grandparents take to allocate assets for their grandchildren to inherit?
Keep estate plans up to date
The growth of a family can seem explosive when grandchildren start arriving. Particularly if grandparents had several children, they might see numerous grandchildren born within a few years. Wills and other testamentary instruments are vulnerable to challenges when they are clearly out of date. Those who want to ensure that their grandchildren inherit from their estates likely need to routinely update their estate planning documents to properly reflect the size of their family and to include each of their grandchildren specifically.
Consider funding a trust
Minor children typically cannot inherit directly. Instead, their parents control their assets until they become legal adults. Especially in cases where grandparents choose to disinherit parents in favor of grandchildren, a direct inheritance might end up squandered by the parents before the grandchildren are old enough to use those resources.
Grandparents may want to fund trusts so that grandchildren can access resources to start businesses, pay for college, cover wedding costs or otherwise start their adult lives. Trusts can provide ongoing resources in certain circumstances and are less susceptible to litigation than wills.
The size of a family, the legacy intentions of grandparents and many other factors influence the best way to structure an estate plan to leave resources for grandchildren. Discussing current estate planning documents and personal wishes with a skilled legal team can help grandparents leave something meaningful for their grandchildren when they pass.
