Leaving inheritance to grandchildren-Will you?

[Allan]

I am redoing my will, and leaving most of my assets to charity and my one daughter. I also have 2 grandchildren. Other than a small token amount, or for education or perhaps a disability, would you leave a substantial (I know that is subjective) amount to grandchildren?

[jebmke]

this is a personal decision, not a financial one unless your goal is to skip a generation in order to avoid estate taxes at your daughter's level in the chain.

[TomatoTomahto]

Unless there are complicating factors, I would leave assets to daughter.

[Scubadude]

I am redoing my will, and leaving most of my assets to charity and my one daughter. I also have 2 grandchildren. Other than a small token amount, or for education or perhaps a disability, would you leave a substantial (I know that is subjective) amount to grandchildren?

Your money your rules; however- eventually (most) charitable gifts are forgotten and supplanted. As with all history, the living will decide your legacy.

[jebmke]

I am redoing my will, and leaving most of my assets to charity and my one daughter. I also have 2 grandchildren. Other than a small token amount, or for education or perhaps a disability, would you leave a substantial (I know that is subjective) amount to grandchildren?

Your money your rules; however- eventually (most) charitable gifts are forgotten and supplanted. As with all history, the living will decide your legacy.

if giving to charity is to create a legacy, I'd suggest looking somewhere else.

[RetiredAL]

We have UTMA's for our grand-kids -- getting started in life money.

The bulk of whatever is left of our assets will go to our three children.

[RadAudit]

It sort of depends on how you figure it.

I'm 76. DW is 72. We plan on making modest distributions to the kids from the estate while we're alive and helping the grandkids with some college expenses while we're alive, if necessary. (Matching distributions will be made to the kid who has fewer children to keep things equal.) After we die, what remains in the estate is split 50 /50 with the kids and after their demise the remainder is distributed to the grandkids.

It's hard to figure out how much of an inheritance the grandkids will get or if / when because there are a lot of unknowns between now and then.

[cchrissyy]

i don't have grandchildren yet but yes i would probably want to leave them something directly.

[davebeers]

Still too young to make that determination. My wife lost her mother at a young age. When her grandmother passed she left my wife and her sister a COD amount and some land that she gets rent on. The timing of that initial inheritance was so timely as we were just deciding to try to build an emergency fund. We put the whole amount in our emergency fund and committed to building on it. Over time it grew while we added and it is what allowed us to pay cash for our house when interest rates were 7%

[sailaway]

Do you already have all the grandkids you are going to get?

For my parents, their youngest grandchild will be an adult soon, so they are starting to consider it. My advice when they raised this with me is to leave at least a nominal amount to my brothers (and me, if they want to maintain their usual stance of being equitable, but I won't feel slighted whereas the others might), rather than splitting the whole lot between the grandkids. I also suggested they consider the step grandkid. They haven't had much of a relationship, but I can imagine my brother feeling slighted if his step kid that he raised from a pretty young age is excluded.

Until recently, the in laws viewed their legacy as funding the retirement of an unprepared child while being split equally between all siblings (youngest is already FI, the third is saving just fine, if not quite at financial mutant levels). I think now that they are letting go of that as an obligation and as the grandkids are becoming adults, they will start to consider the grandkids more.

Both kind of figure that the kids have shown their stripes and at least some subset of their kids hasn't given their own kids the advantages they themselves were given.

[delamer]

We have two children and one grandchild (to date).

I like the idea of leaving some money to grandchildren.

I’m thinking of a percentage, rather than a flat dollar amount. Hopefully, they won’t inherit anything for another 20 years, and who knows what our estate will be worth then?

Also considering 529 plan contributions and setting up a UGMA account now.

[Broken Man 1999]

Current plan/hope is leaving 25% of estate to each of two daughters, and 12.5% to each of the four grandchildren.

Broken Man 1999

[Lee_WSP]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

[malabargold]

Current estate tax-free limits will likely be sharply curtailed by the end of 2025.
If one has assets in excess of the new projected limits, consider giving them away before then.

[JoinToday]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

What latitude do the children have in allocating the trust assets for the grandchildren? And what latitude do the grandchildren to in allocating trust assets to the following generation(s)?

This is something I think about. My heirs will likely inherit some money (7 figure amount), but they will likely not spend or need it, based on their spending habits & current income (adult children, launched, self supporting, and living below their means currently). Their inheritance could grow a lot in the next 40 - 50 years. My goal would be for each generation to have the ability to determine how the following generation has access to the money, depending on spendthrift issues, etc.

[Lee_WSP]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

What latitude do the children have in allocating the trust assets for the grandchildren? And what latitude do the grandchildren to in allocating trust assets to the following generation(s)?

This is something I think about. My heirs will likely inherit some money (7 figure amount), but they will likely not spend or need it, based on their spending habits & current income (adult children, launched, self supporting, and living below their means currently). Their inheritance could grow a lot in the next 40 - 50 years. My goal would be for each generation to have the ability to determine how the following generation has access to the money, depending on spendthrift issues, etc.

I draft it so that the entire line are permissible beneficiaries. It’s written as primary beneficiary and their descendants….

[JoinToday]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

What latitude do the children have in allocating the trust assets for the grandchildren? And what latitude do the grandchildren to in allocating trust assets to the following generation(s)?

This is something I think about. My heirs will likely inherit some money (7 figure amount), but they will likely not spend or need it, based on their spending habits & current income (adult children, launched, self supporting, and living below their means currently). Their inheritance could grow a lot in the next 40 - 50 years. My goal would be for each generation to have the ability to determine how the following generation has access to the money, depending on spendthrift issues, etc.

I draft it so that the entire line are permissible beneficiaries. It’s written as primary beneficiary and their descendants….

How are the children given the right to change the terms of the trust, or are they? I would like to give my children the right to change how the assets are distributed to their children.

I am thinking my heirs can get money from the trust under certain conditions, but my children may want to change the conditions under which the grandchildren have access. My children are responsible, but I have no idea how the grandchildren will turn out. Spendthrift, special needs trust, etc; or maybe my child wants to exclude a grandchild due to drug use, already wealthy, etc.

[Lee_WSP]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

What latitude do the children have in allocating the trust assets for the grandchildren? And what latitude do the grandchildren to in allocating trust assets to the following generation(s)?

This is something I think about. My heirs will likely inherit some money (7 figure amount), but they will likely not spend or need it, based on their spending habits & current income (adult children, launched, self supporting, and living below their means currently). Their inheritance could grow a lot in the next 40 - 50 years. My goal would be for each generation to have the ability to determine how the following generation has access to the money, depending on spendthrift issues, etc.

I draft it so that the entire line are permissible beneficiaries. It’s written as primary beneficiary and their descendants….

How are the children given the right to change the terms of the trust, or are they? I would like to give my children the right to change how the assets are distributed to their children.

I am thinking my heirs can get money from the trust under certain conditions, but my children may want to change the conditions under which the grandchildren have access. My children are responsible, but I have no idea how the grandchildren will turn out. Spendthrift, special needs trust, etc; or maybe my child wants to exclude a grandchild due to drug use, already wealthy, etc.

You can give your children the ability to appoint the assets upon death. You can limit this power.

You can give a trust protector the power to amend the trust too.

[PatrickA5]

We won't leave anything directly to the grandchildren.

Not exactly an inheritance, but we're thinking of opening 529s for the grandkids. We currently have three from my middle daughter and one "on the way" from my oldest daughter. Youngest (son) isn't married and doesn't have kids.

So, do we keep this equal per family or per grandchild. My initial thought is to provide for the grandchild and not try to keep the families equal. For example, put in say $5K per grandchild. If my son ended up having kids, I'd catch up for that grandchild. I would probably be the owner of the 529 with the grandchild beneficiary. At some point, I would probably move the ownership to the parent.

Any thoughts?

Our past gifts to our three children have always been equal.

[Stinky]

We won't leave anything directly to the grandchildren.

Not exactly an inheritance, but we're thinking of opening 529s for the grandkids. We currently have three from my middle daughter and one "on the way" from my oldest daughter. Youngest (son) isn't married and doesn't have kids.

So, do we keep this equal per family or per grandchild. My initial thought is to provide for the grandchild and not try to keep the families equal. For example, put in say $5K per grandchild. If my son ended up having kids, I'd catch up for that grandchild. I would probably be the owner of the 529 with the grandchild beneficiary. At some point, I would probably move the ownership to the parent.

Any thoughts?

Our past gifts to our three children have always been equal.

We’ve done 529 for grandkids.

One adult child of ours has no kids, one has two, and one has “a few more than two” kids of their own. But each grandchild gets an equal amount.

[TomatoTomahto]

We have always tried to stick to the view that we don’t want to reward or financially penalize any lifestyle choices. So, we don’t favor home ownership over renting, formal marriage versus less formal, being parents over being child free, etc.

[dcdowden]

We plan to provide substantially equal amounts to each grandchild in a 529 plan for them. I am interested in the possibility of using methods to distribute inheritance to grandchildren as well, but have not done that yet.

[Gnirk]

My daughters are my primary beneficiaries. We often travel together. Should all three of us perish near or at the same time, my step-granddaughters are my secondary beneficiaries.
Other than that, neither my husband nor I leave anything directly to the grandchildren.

However, my husband has paid for all four granddaughters' post-secondary education, and provided them with cars for their 16th birthdays.

[sailaway]

We have always tried to stick to the view that we don’t want to reward or financially penalize any lifestyle choices. So, we don’t favor home ownership over renting, formal marriage versus less formal, being parents over being child free, etc.

How does that affect whether or not you include grandchildren directly in your will?

[Stinky]

However, my husband has paid for all four granddaughters' post-secondary education, and provided them with cars for their 16th birthdays.

Now that’s a generous grandpa!

[TomatoTomahto]

We have always tried to stick to the view that we don’t want to reward or financially penalize any lifestyle choices. So, we don’t favor home ownership over renting, formal marriage versus less formal, being parents over being child free, etc.

How does that affect whether or not you include grandchildren directly in your will?

Because it financially benefits the children who have children of their own, which we don’t care to do. Our heirs will each inherit significant amounts which they can then distribute to their offspring (if any) as they see fit.

We gift the annual exclusion max to each child regardless of their marital status, financial status, etc.

I’m not saying that it’s the right thing to do, just that it’s what we choose to do.

[randomguy]

I am redoing my will, and leaving most of my assets to charity and my one daughter. I also have 2 grandchildren. Other than a small token amount, or for education or perhaps a disability, would you leave a substantial (I know that is subjective) amount to grandchildren?

I think the definition of substantial matters a ton. And the age of the grands. Giving enough money so the kid can retire is a lot different than a house downpayment or a nice car. And the kid getting the money at 10, 20 or 30 matters a lot. As a parent, I don't think I would be too thrilled if my parents gave a 15 year old say 1 million bucks to do what they please. Even things like trusts can be problematic. At 30? Give away.

[Broken Man 1999]

We won't leave anything directly to the grandchildren.

Not exactly an inheritance, but we're thinking of opening 529s for the grandkids. We currently have three from my middle daughter and one "on the way" from my oldest daughter. Youngest (son) isn't married and doesn't have kids.

So, do we keep this equal per family or per grandchild. My initial thought is to provide for the grandchild and not try to keep the families equal. For example, put in say $5K per grandchild. If my son ended up having kids, I'd catch up for that grandchild. I would probably be the owner of the 529 with the grandchild beneficiary. At some point, I would probably move the ownership to the parent.

Any thoughts?

Our past gifts to our three children have always been equal.

I keep the generations equal, DDs get the same, grandchildren get the same. I can't see a grandchild getting less just because he/she has siblings.

Broken Man 1999

[Longdog]

I am redoing my will, and leaving most of my assets to charity and my one daughter. I also have 2 grandchildren. Other than a small token amount, or for education or perhaps a disability, would you leave a substantial (I know that is subjective) amount to grandchildren?

Your money your rules; however- eventually (most) charitable gifts are forgotten and supplanted. As with all history, the living will decide your legacy.

if giving to charity is to create a legacy, I'd suggest looking somewhere else.

Could you elaborate what you mean? Are you saying that eventually nobody will remember it was you who gave the gift, or that the charity will not even get it? Or something else?

[CloseEnough]

I am redoing my will, and leaving most of my assets to charity and my one daughter. I also have 2 grandchildren. Other than a small token amount, or for education or perhaps a disability, would you leave a substantial (I know that is subjective) amount to grandchildren?

Your money your rules; however- eventually (most) charitable gifts are forgotten and supplanted. As with all history, the living will decide your legacy.

if giving to charity is to create a legacy, I'd suggest looking somewhere else.

Could you elaborate what you mean? Are you saying that eventually nobody will remember it was you who gave the gift, or that the charity will not even get it? Or something else?

I had the same question. And also wonder whether "charity" and "nonprofit" are synonymous here, or charity means something different. If the thought is that donations to nonprofits that have a mission that is consistent with your values are useless, I don't get it. I don't think that charitable gifts are forgotten and supplanted by those who benefit from the charitable work.

[DarthSage]

My MIL left inheritances to her grandchildren. She divided it "per son" (she had 2), rather than "per grandchild" (she had 7). I understand her reasoning, but I plan to go a different route.

Her intent was to pay for college and give the grands a good start in life. When she died, 3 had finished college, 2 were in college, and 2 were younger. With what DH and I inherited, we are continuing to pay for college for our remaining children.

Because our kids were well set-up by their grandmother, we're less concerned about leaving them an inheritance ourselves. We'll set up college accounts for grandchildren if/when we get them (no, the cat doesn't count!). If we have an estate when we go, it'll likely go mostly to our 4 kids, with possible bequests to the grandchildren.

[fourwheelcycle]

My wife and I have two children. One has two children of their own and the other has three children of their own. We decided to fund college expenses for each grandchild and we have already done that, while we are alive, using 529s. Our estate plan leaves 25% to charity and the balance to our children, in equal shares.

[Prudence]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

I like this. We have a married daughter with two kids. If we leave 100% of our assets in a trust for our daughter, is it possible that after our deaths our daughter could dissolve the trust so that the assets may ultimately wind up with someone who is not our daughter or her kids?

[LiveSimple]

Great thoughts here, observing or learning as well...

More towards "wealth is to be earned and not transferred... "

So anything is good....transfer to kids or grand kids or charity

[Jack FFR1846]

My wife and I have two children. One has two children of their own and the other has three children of their own. We decided to fund college expenses for each grandchild and we have already done that, while we are alive, using 529s. Our estate plan leaves 25% to charity and the balance to our children, in equal shares.

I had to chuckle at the term "children of their own". I'm thinking "what's the alternative?". Perhaps children who happened to be walking in the park that we picked up and brought home.

As far as the original topic, everything goes equally to our 2 sons. If one has 90 children and the other has none, I could care less. They get nothing. I mean....it's easy enough to just pick up stray kids at the park, right?

[JackoC]

We have always tried to stick to the view that we don’t want to reward or financially penalize any lifestyle choices. So, we don’t favor home ownership over renting, formal marriage versus less formal, being parents over being child free, etc.

How does that affect whether or not you include grandchildren directly in your will?

Because it financially benefits the children who have children of their own, which we don’t care to do. Our heirs will each inherit significant amounts which they can then distribute to their offspring (if any) as they see fit.

We gift the annual exclusion max to each child regardless of their marital status, financial status, etc.

I’m not saying that it’s the right thing to do, just that it’s what we choose to do.

As you've said before and I generally agree. Actual legal/will/trust stuff is even shares for kids; grandkids would evenly split their parent's share if parents predecease us, as per standard boilerplate. With 'warm hand' giving we're a little more flexible (or inconsistent). We decided to set up 529 for 1st grandkid and not count it as gift to their parent*. But we plan to include anything we do for the grandkids while actually kids (could get significant if eg. match funding pre-college school costs) as gift to their parent, in the spreadsheet where the total has to remain even by kid. Establishing anything as grand kid's may be influenced, in our case, by gc going from theory to reality. I could see that further influencing people fortunate enough to have long close direct relationships with gc's perhaps into their adulthood. Yes, it's just what you choose rather than universal right way.

*Not ignoring that money is fungible in case his parents would otherwise feel obligated to fund college in which case this takes financial weight off them. And not based on assuming the grandkid would otherwise strictly have to fund own college either. It's more ambiguous than straight up analysis of whose financial liability we're covering. Also not worried about general 529 plan uncertainties, 'what if college isn't right for him?' It will get figured out.

[DSBH]

We have one daughter and (very recently) one grandchild. We'll review/revise our estate plan at some point but our intent is to leave roughly half to DD and half to grandkid(s).

[Robdac]

A six figure inheritance in your 20's can be life changing. A seven figure inheritance in your 60's sometimes won't move the needle at all. Food for thought.

[sailaway]

My wife and I have two children. One has two children of their own and the other has three children of their own. We decided to fund college expenses for each grandchild and we have already done that, while we are alive, using 529s. Our estate plan leaves 25% to charity and the balance to our children, in equal shares.

I had to chuckle at the term "children of their own". I'm thinking "what's the alternative?". Perhaps children who happened to be walking in the park that we picked up and brought home.

As far as the original topic, everything goes equally to our 2 sons. If one has 90 children and the other has none, I could care less. They get nothing. I mean....it's easy enough to just pick up stray kids at the park, right?

The alternative is step children. How they are treated may depend on when and how completely they came into your lives.

I don't consider my grown nieces and nephews getting a share as benefitting my siblings over me at all. I imagine my spouse's sibling would get more benefit from their many underage kids getting a share, but the goal would be to make the kids' lives better, any benefit to the parents would be incidental.

[bltn]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

We are leaving a portion of our assets to the children outright as beneficiaries or TOD. The majority of our assets we are leaving to the children in spendthrift trusts. These trusts should still be in existence for the benefit of our grandchild on the demise of our children. Possibly there will be assets for great grandchildren.
In addition, we are providing 529 funds for our grand daughter s education.

[WhiteMaxima]

For what? for them to buy lamborghini and nice vacation? Can't they make their own. I would leave 529 for each of them instead.

[CaptainT]

A friend of mine is the youngest of 4 kids and 6th of 8 grandkids. She was born a few months after her grandparents died and left lots of money to each of the grandkids enough that each grandkid born before grandparents died had enough for college education and homes purchase and still had extra. My friend and her youngest cousin got nothing. Friend is basically ok with it but a bit envious but youngest cousin really upset that doesn't get paid for house and college.
Basically could your kids still be having kids ? If so you might be setting up some really nasty issues with excluding grandkids who both never get to know you and don't get the benefit of your will

[increment]

For what? for them to buy lamborghini and nice vacation? Can't they make their own. I would leave 529 for each of them instead.

Why should you leave an inheritance to anyone else at all?

[Lee_WSP]

Most of my clients do not give specific bequests to their grandchildren. I always advise them to leave assets in trust for the children. This protects them against creditors, estate taxes, divorce, and guides the assets still in trust to the next generation.

I like this. We have a married daughter with two kids. If we leave 100% of our assets in a trust for our daughter, is it possible that after our deaths our daughter could dissolve the trust so that the assets may ultimately wind up with someone who is not our daughter or her kids?

Anything is possible, but I can make it really really really hard for the children to do that.

[Duckinator]

My in-laws are still with us but made written promises to give the old family business to one grandchild worth ~$6M and much smaller bequeaths to other grandkids. That was setting up resentment. Now with a bitter divorce in progress and threat of a lawsuit they regret it. Seems best to give to the next generation as they are firmly established in their life with less chance of issues, over giving to a fluid grandchild dynamic. I can't say anything - I'm merely the SIL. Nor would I say anything about the in-laws using EJ (hey they got a BBQ dinner! .. snort)

[Luke Duke]

A six figure inheritance in your 20's can be life changing. A seven figure inheritance in your 60's sometimes won't move the needle at all. Food for thought.

Yep. My wife's grandparents passed away and left their estate to their 4 kids in their 60's. It didn't move the needle for 3 of them. The 4th has had no trouble spending his share.

[cshell2]

For what? for them to buy lamborghini and nice vacation? Can't they make their own. I would leave 529 for each of them instead.

Well, I mean, depending on the size of that 529 they can buy a lamborghini or take a nice vacation with it anyhow.

[fourwheelcycle]

I had to chuckle at the term "children of their own". I'm thinking "what's the alternative?". Perhaps children who happened to be walking in the park that we picked up and brought home.

Ha! I guess I need to read what I am saying and edit my posts more carefully!

[mnnice]

I don’t presently have any grandchildren. I do have two young adult offspring. I would consider giving to grandchildren but since my family is known for being in no hurry to either marry or reproduce I will wait till one or more actually show up the included them in any estate planning.

I wish my surviving parent would start giving to grandchildren with a warm hand. She is 80 and clearly not in danger of outliving her money. Her grandchildren range in age from 8 to 22. One in elementary, one in middle, one in high school, one in college, and one working.

The oldest grandchild’s higher education was cheap because his state of residence paid all his tuition because he was getting a degree in a shortage area.

The youngest is likely to have funding from grandma as a function her passing.

The middle three probably could benefit from some 529 contributions now/soon. I’ve hinted but not received much response.

[bltn]

A six figure inheritance in your 20's can be life changing. A seven figure inheritance in your 60's sometimes won't move the needle at all. Food for thought.

I can see the benefit of providing for children early in life when they are in need. But to simply increase the spending lifestyle of self sufficient children early in life might not be good for them. As parental gifts are spent, lifestyle inflation might be established, which might be hard to support with their earnings if they are saving sufficiently. Of course, anything that tends to decrease savings is detrimental.

Leaving money to children later in life might help support a more comfortable retirement, or at least provide added security, if retirement savings are a bit tight.

Just another point of view.