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Setting up inheritances for grandchildren

Many grandparents in Polk County likely have close relationships with their grandchildren. Some grandparents have the opportunity to spend substantial time with their grandkids, and thus they build loving bonds over time. In some families, children may even live with their grandparents for periods of time throughout their lives.

Based on the strong ties that some grandparents are able to build with their grandchildren, they may wish to include these relatives in their wills. Although it is not uncommon for grandparents to want to leave some of their estate and assets directly to their grandchildren, there are some factors that they should consider before doing so.

When a grandparent chooses to set up an inheritance for a minor grandchild, for example, he or she may want to set up a trust so that a trustee can safeguard and manage the assets for the benefit of the minor child. Likewise, if the grandparent wants the grandchild to use the inheritance for a particular purpose, like a college education, a trust can be a useful option, but so too can other vehicles, like a Florida 529 Savings Plan.

Even if the grandchild is an adult, a grandparent may not want to just leave that person a large sum of money, or other valuable assets, outright. For example, the grandchild could have large outstanding debts or other life circumstances that could cause depletion of the inheritance. In those situations, the grandparent may want to set up the estate plan so that the grandchild does not directly inherit the assets, or does not receive them all in one lump sum.

Like all other issues involving inheritances and estate administration, grandparents who want to leave assets to their grandchildren should not leave important issues to chance. A thorough estate plan can help grandparents achieve their goals in a sensible and legally sound manner.

Source: lakeconews.com, "Estate Planning: Gifts and inheritance for grandchildren require planning," Dennis Fordham, Jan. 7, 2017

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