April 02, 2021
Gifting Your Grandchild An Estate Plan
I saw this article in the Wall Street Journal about gifting an estate plan to your grandchildren.
If you would like to gift an estate plan to one of your grandchildren, just reach out to us at 844-885-4200 or www.castlewealthlegal.com
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Best Gifts You Can Give Your Grandchild
Hi, this is Chris Berry with Castle Wealth Group, and today we’re going to talk about how one of the best gifts you can give your grandchild is an estate plan. And if you liked this information, please make sure to subscribe to our YouTube channel.
Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications, such as Forbes, Kiplinger’s, Crain’s Detroit, and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning, and has authored the Amazon best selling book, The Caregiver’s Legal Guide.
So I saw this recent Wall Street Journal article that talked about one of the best things that you can do for your grandchild is to gift the parents an estate plan. Now why is this important? Well, if you have minor grandchildren, if they’re under the age of 18, one of the biggest concerns would be, God forbid something happened to your son or daughter, who’s going to raise that grandchild? Are they going to go into foster care?
One of the most important things if you have minor children or grandchildren is to make sure that an estate plan is set up where we’ve appointed guardianship, so that’s done inside of a will. It doesn’t have to be really complicated, a will you appoint a personal representative to wrap up your affairs, and then if you have minor children under the age of 18, or minor grandchildren under the age of 18, then we need to appoint guardianship inside of that last will and Testament. This would be the person that steps in if that parent is unavailable or were to predecease, who would take care of that grandchild or child? And if you’re a grandparent, maybe that role would fall to you.
Appointing a Guardian
And so the Wall Street Journal article talked about how important it is A, to appoint a guardian in the will for any minor children, and then B, one of the important things is to make sure that we have enough money to support that child or that grandchild, God forbid, something happens to a parent. Not only do we have enough money, and typically it’s going to be funded through life insurance, even just term easy, low cost death benefit life insurance like term life insurance, running for the term of that minor child, but then also with a trust we need to structure how that money would be used for the benefit of that child or that grandchild, because right now my kids are 10 and 8, god forbid something happened to me, I don’t want to 10 and 8 year old running around with a boat full of money from life insurance proceeds, they’re going to spend all that money on stuffed animals and Legos.
So that’s why in addition to having that will, that you appoint guardianship for that child or grandchild, it’s also important to have a trust, and that trust will control how the money is used for that child or grandchild. Plus, we probably don’t want that money going outright to an 18 year old, maybe we want it held in trust, because think about it, when you were 18, if you inherited a lot of money, whether it was 5,000, 50,000 or 500,000, think about the decisions that you would make, probably not the most ideal decisions. So instead with a trust, we can appoint someone as a trustee, which could be a family member or a loved one, to manage the money for the benefit of those minor children or grandchildren.
So really interesting article talking about giving the gift of estate planning to your grandchildren, and what you would have to do is have your child set up that estate plan, appointing guardianship, maybe you as the grandparent would be the guardian and trustee of that money. Just something to think about from an estate planning perspective. This has been Chris Berry, if you like this information, please make sure to subscribe to our YouTube channel.
Castle Wealth Group has clients across the nation, and helps families plan, protect, and preserve what is important by creating a retirement and legacy blueprint.