Have Grandkids? Here’s an Estate Planning Approach for You

Anyone who wants a lasting say in decisions about their health care, finances and legacy should have an estate plan. Here are some specific estate planning considerations for those lucky grandparents.

Grandparents form a special bond with their grandkids, bringing joy, love and wisdom that can be passed down for generations to come. While becoming a grandparent is incredibly rewarding, it should also serve as a springboard to review your financial and estate plans.

As your family grows, you want to make sure your financial plan and legal documents address your wishes accurately and include everyone important to you. Here are some specific things to consider:

  1. Update your financial goals. Will your grandchildren be included in your financial goals? Is there a desire to support them financially? Has your travel budget increased with an extra trip to Disney now in your plans? Speak with your advisor to talk through how your retirement plan might be affected by grandchildren.
  2. Review your estate plan. Do you want your children included in your estate plan? Do you have ideas about how (and how much) of your wealth you want to transfer to them some day? We suggest reviewing your estate documents with your advisor, including your will, trusts and beneficiary designations to ensure that grandkids are accounted for. You might also want to consider how trusts for grandchildren can offer more protection and control over how an inheritance is eventually used.
  3. Tax efficient gifting. Today, you can gift up to $17,000 per person (or $34,000 per married couple) without using your gift and estate tax exemption. This is an efficient way to reduce your taxable estate while providing financial support to grandchildren and other family members.
  4. Education planning. If you wish to help your grandkids with education costs, you should consider a 529 college savings plan. A 529 plan allows you to save for your grandchild’s education on a tax deferred basis. Withdrawals are free of federal income tax when used for qualified education expenses.
  5. Accounts for minors. You may also consider a custodial account such as a UTMA (Uniform Transfers to Minors Act) or UGMA (Uniform Gift to Minors Act) account, which allows you to save for a minor and keep control of the account until they reach the age of majority. You can use this type of account for college savings or any other purpose that would be helpful to a grandchild.
  6. Communication. If you plan to support your grandkids financially, it may be beneficial to have financial discussions with their parents to ensure there is a cohesive plan in place. When it comes to money, nobody likes surprises, so involving everyone who is affected and starting the conversation early is usually best.

When there is a significant life event such as welcoming a new grandchild, it is a good time to review your personal goals, family dynamics and the potential impact on your financial strategy. We believe that it is wise to work with a professional wealth advisor and estate planning attorney to create your plan, protect your assets, ensure that your wishes are honored and establish a solid foundation for future generations.

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Lisa Neira, CFP

Lisa Neira, CFP

Wealth Advisor

Lisa is a Wealth Advisor in our Morristown, NJ, office. She advises clients on financial planning, tax planning and investment management to help them achieve their financial goals leading up to and through retirement. Lisa joined legacy firm RegentAtlantic in 2021, bringing over 10 years of experience in wealth management and providing financial advice to high net worth individuals and families.



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