Outright Gifts to Grandchildren: What to Do Instead

As part of your California estate planning, you may be curious about the various ways to pass on assets to your grandchildren. Most people in California are already familiar with the importance of having a will but may not be as aware about other options for comprehensive estate planning.

The will is certainly the cornerstone and the very base of your estate plan, but a will does not help your loved ones avoid probate. The convenience of a will can be problematic for a couple of factors related to grandchildren. The first of these is unexpected life events. Leaving your grandchild a large investment account, a home, or a cash gift could be a transformative event for them. However, a divorce or marriage in the future could impact the longevity or stability of your intended legacy.

Maturity is a second concern when making outright gifts to grandchildren. Grandchildren do not always have the experience or maturity to save or invest gifts or spend the money as you may have intended them to do so. This means that a grandchild may quickly squander an inheritance, making it a leading reason for using a trust for estate planning purposes. You can add more control and give yourself peace of mind knowing that you’ve taken necessary steps to protect someone who may need more financial maturity to handle a big inheritance. 

The final concern is age. If a grandparent passes away before the beneficiary reaches the age of majority, that child may be unable to receive the assets that you set aside in your estate plan, such as cash, accounts, or real properties. For more information about setting aside a strategy for making gifts to grandchildren, contact our experienced Pasadena estate planning lawyers.

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