Many grandparents wish to include their grandchildren in their wills. They may set up life insurance policies or specifically bequeath dollar amounts or possessions to ensure their grandchildren are provided for. Some even go so far as to establish provisions for how the money should be used, whether it be for college, cars, or weddings. The decision to include grandchildren in your will is completely personal. While you may have conversations with your grown children about your wishes, the only way to ensure that those wishes are carried out is to draft a will that explicitly includes your grandchildren. As difficult as it may be to discuss, the truth is that death and the division of estates—if not handled properly beforehand—can lead to animosity, greed, and significant implications for family dynamics.
Essential Documents for Including Grandchildren in Your Will
In addition to a last will and testament, you should also create a living will, often referred to as a health care directive. Beyond these two documents, certain additional documents must be in place to include your grandchildren in your will.
You must ensure that your will specifies the executors, guardians, and trustees. If you have minor children, these designations are necessary to prevent the monetary assets you leave to your grandchildren from being tied up in red tape. Designate one trusted person in your family as the power of attorney, who will handle the financial aspects of your will and related matters. This person won’t be able to override your last will and testament but can mediate and intervene should issues arise.
If you have life insurance and want to ensure that your grandchildren are included, you must designate them as beneficiaries. For minor children, clauses should be in place to ensure that the money stays in escrow until they reach a certain age or milestone. Designate their parents as guardians of the account to prevent them from accessing the funds before their child reaches a specific age. To determine how much life insurance you need, consult a trusted and qualified insurance professional, as rates vary significantly from company to company.
Another issue that can arise from improper planning is unclear language. Simply designating a percentage of the estate or a specific dollar amount to all grandchildren is insufficient. You must list each grandchild specifically, providing their dates of birth and social security numbers to ensure proper division of the funds. Additionally, consider that more grandchildren may be born after your passing. If you want these children included as well, you must make provisions for them and develop escrow estate funding to accommodate their inclusion. Failing to do so could lead to disputes among your grown children and result in your estate being tied up in court.
When designating executors for your grandchildren—necessary to keep the funds out of state or federal judicial processes—you don’t have to choose a parent or guardian. You can select a trusted friend, professional acquaintance, or agency to act in the best interest of your grandchildren. Again, make the language very specific to avoid any legal discrepancies. Including your grandchildren in your will and ensuring they receive what you intend should be carefully overseen by an attorney.
If you have an extended stepfamily, it’s vital to specifically include these children—by name and social security number—if you want them to receive anything. Unless your child has legally adopted a stepchild, the judicial system will not recognize them as eligible to inherit unless you state their name explicitly.
Another consideration is taxation. While you want to include your grandchildren in your will, you don’t want to prematurely burden them with tax issues. Legally, you can transfer up to $12,000 per year to each grandchild without incurring taxes. This means that two grandparents can gift a total of $24,000 per year without tax implications for their grandchildren. Be aware that a skipping tax may apply if you bequeath directly to grandchildren while bypassing their parents. For particularly large estates, simply leaving money or instructions for the grandchildren is not enough. You must be very clear about the laws regarding amounts and purposes of the funds. You can legally set up accounts before you pass and designate your grandchildren as beneficiaries to fall under specific tax requirements, ensuring they are not excessively taxed.
When it comes to estate law, it’s difficult to be overprepared. If you want to include grandchildren in your will, it’s essential to consult a professional to ensure the language of your will is clear. When dividing physical assets, be specific about which items are designated for whom. You cannot simply state that grandchild A is to receive your hall painting and expect that they will. The division of assets—especially across generations and among multiple children and grandchildren—should be periodically reviewed and discussed with your family in advance. Ultimately, estate law is about precise wording and preparation, not just conversations about your wishes. The worst outcome is having your estate tied up in court for months or years. You also want to avoid leaving behind confusing messages that could divide your family.
2 Responses
“You should designate one person in your family as the power of attorney – whom you will trust to handle the financial ramifications of your will and other matters.”
This is bad advice. A Power of Attorney is only good while the person giving it is alive.
Should grandchildren (they are adults) be told they are in their grandparents wills? We are estranged at this time but I hope I can reach out to them in the near future., ( I am 88 yrs old)