Many Delaware grandparents want to leave their children and their grandchildren an inheritance. Ordinarily, grandchildren are named as alternate beneficiaries should the parents predecease the grandparents, but gifts and inheritances for grandchildren can be arranged as well. Special considerations need to be addressed during estate planning in order to ensure that those bequests and gifts are appropriately handled if the grandchildren are minors.
Minors cannot own assets, so they cannot receive them as inheritances or gifts directly. Gifts of around $50,000 or less can be placed into college accounts or an account opened in accordance with the Child Uniform Transfer to Minors Act. Another option is to create a trust, which is also considered the best option for larger amounts of money, real property or other sizable assets.
Trusts provide their creators with the option of determining when distributions are made. This can help ensure that the assets provide for a grandchild for years. In addition, trusts protect assets from creditors and other family members who might take advantage of the beneficiary. Furthermore, if the grandchild has special needs, putting the assets in a trust protects the grandchild’s right to government benefits.
Delaware residents who want to leave assets to their grandchildren should explore their options. Estate planning provides numerous options for grandparents. Trusts can be tailored to an individual’s needs and desires. Knowing that a gift or inheritance for a minor grandchild is safe and will be available to him or her later in life could provide grandparents and the rest of the family with peace of mind.
Source: lakeconews.com, “Estate Planning: Gifts and inheritance for grandchildren require planning“, Dennis Fordham, Jan. 7, 2017