It is a common estate planning goal for grandparents to think about how they may support their grandchildren financially, but it is also often the case that you may have concerns about misuse of the funds. By directly giving cash or other assets, there’s no guarantee that this money will be used for the intention you wanted. Money that you hoped would be used for college expenses could be spent in other ways. For example, you can work with a Pasadena estate planning lawyer to protect against misuse of funds by grandchildren.
A lawyer can walk you through the various tools and strategies available to you to help you accomplish your goals and support your grandchildren. Since there are many options available to you, it’s best to find a lawyer who is familiar with California and federal law and someone who has helped others in your situation before.
First, you could transfer money into a trust established to benefit a grandchild. Second, you could reduce the size of your taxable estate while using a 529 account, also known as a 529 plan, to earmark funds for the higher education of your grandchild. Third, you can make gifts to a custodial accounts, a custodial account that parents can establish for a minor child. Fourth, you can make use of your annual gift tax exemption to pay for medical or educational costs for your grandchildren, but what should make these payments directly. Finally, you can use other gift vehicles such as savings bonds or IRAs.
By working with a Pasadena estate planning lawyer, you greatly increase your chances of success to ensure that your intentions are protected and that your grandchildren have the best possible opportunity to use these funds as you intended. Contact our office today to learn more about establishing a comprehensive estate plan, including making gifts to grandchildren.
