Florida residents know that being a grandparent gives you a lot more to think about in terms of what happens after you’re gone. Many grandparents adjust their estate plans to account for grandchildren, which can be a challenge if you’ve never done it before.
Estate plans should address both children and grandchildren as beneficiaries, addressing which assets should go to your children and what assets will go to your grandchildren. How you split up your assets will depend on the dynamics of your family and what assets you have to pass down. There are several things to consider when including grandchildren in your estate plans.
What if your grandchildren are minors?
If your grandchildren are minors, you should still plan for them to be beneficiaries of some of your estate. The hope is that you won’t pass until they’re all grown up and over the age of 18, but it’s important to start the estate planning process when they’re young just in case.
How should you pass down assets?
For couples who don’t have a lot in their estate to pass down or who want to keep it easy, you might get away with just having a will. The will should be detailed, addressing what happens to life insurance accounts as well as your retirement funds.
Families with a lot of beneficiaries or high-net-worth assets might consider establishing a trust. A trust might cost more money upfront, but it allows for the seamless transfer of funds and assets from you to your beneficiaries.
Trusts are also great for avoiding estate taxes. A lot of times, estate taxes come out of your inheritance to your children and grandchildren, which sometimes isn’t even enough to break even.
How often should you update your estate plan?
Your estate plan should be updated frequently with every major life event or new grandchild added to your family. Updating your estate plans often also allows for you to address different needs of your grandchildren in your will and can give your family peace of mind in event of the sudden and unexpected.