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An ideal estate plan for grandparents

On Behalf of | Nov 23, 2021 | Probate & Estate Planning |

Estate planning in Pennsylvania isn’t limited to passing assets to your immediate children. No matter what your plan is, you can leave specific assets to grandchildren also. When you become a grandparent, you have the right to leave money, investments and other property to a grandchild.

Trusts and why they matter

Estate planning with grandchildren in mind should lead you to reexamine your trust options. Trusts are financial instruments that work to nominate a trustee as fiduciary for your beneficiaries. You can stipulate, for example, that the trustee manages how and when someone makes withdrawals. You can even declare what your beneficiary must do to obtain the assets of a trust. Unless they make life changes or take certain actions, for example, they’ll have no inheritance. You can designate money to be available for support and education, or for special needs.

Retirement plans

Retirement accounts can be given directly to your named beneficiaries if you don’t get a chance to enjoy them. Even if you do access them in retirement, their contents can be transferred if they are not fully utilized. As for IRAs, the assets they hold can be transferred upon your death. For children who pass earlier than you, their assets can be, by default, divided among their existing heirs. The same rules apply to 401(k) plans.

Special needs trusts

A special needs trust is for adults or youths who have disabilities. When individuals with disabilities have substantial assets, however, their wealth might disqualify them from government aid. A special needs trust ensures that those with disabilities aren’t disqualified from public assistance. This is because special needs trusts are private agreements that hold assets outside of their estate.

Estate planning in Pennsylvania

For some estate owners, continuing their legacy of wealth involves including grandchildren in their estate plans. Assigning assets to a grandchild is one way of looking after them when you no longer can. A trust can be a useful vehicle for carrying out your wishes. Unlike a will, trust assets remain private. However, there remain tax implications to leaving money or other assets to grandchildren. You should consult with an experienced estate planning attorney if you are considering setting up a Pennsylvania trust for grandchildren.


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