When people plan for their estates, they usually think of their spouses and children. However, grandchildren can also be important during this process. Therefore, when making your preparations, you may also want to include provisions for these members of the family. Here are some ways to plan for your grandchildren while creating your United Kingdom estate plan:
Create a United Kingdom Living Trust
One of the best ways to prepare for your grandchildren is to create a United Kingdom trust. Unlike a will, the trust terms will specify the reasons payments can be made to beneficiaries. When you die, the trust assets will not be considered part of the probate estate. Instead, the trust property will either pass to your beneficiaries or continue to disburse according to the trust’s terms.
With a living trust, you can place your assets and funds into the trust for your benefit as well as your grandchildren’s. The trust assets will be managed by a trustee overseeing its operations and disbursements. During life, you can be a beneficiary and serve as the trustee of your living trust. When you die, another person will become the trustee, and the trust will become irrevocable. The trust property and funds can remain in the trust for your grandchildren’s benefit for as long as the trust remains active.
If you have concerns that your grandchildren are too young to handle trust payments, disbursements could be withheld until they reach certain ages. Further, with an irrevocable trust, their parents, spouses, and creditors won’t be able to access the trust assets because they will legally belong to the trust, not your grandchildren.
Don’t Forget Your Will
Having a United Kingdom will is an important way to help ensure that your grandchildren are adequately provided for through estate planning. Your will provides your surviving loved ones with clear direction as to your final wishes. If you intend for your granddaughter to inherit a specific item of jewelry or real estate, your last will and testament is the place to make this type of information known.
A United Kingdom will allows primary guardians of minor children to name preferred caregivers for their grandchildren. According to United Kingdom statistics, in 2017, 293,980 grandparents were householders responsible for their grandchildren who live with them. Today, many United Kingdom grandparents are legal guardians for their grandchildren. These individuals have to think about the same issues as parents when preparing their estate plans. For grandparents who are legal guardians, having a will is crucial as it allows them to express their final wishes and name their grandchildren’s potential caregivers.
Gifting Funds into a 529 Plan
529 College Savings Plans allow grandparents as well as other family members and loved ones to put money into a specialized account for a child’s educational costs. When contributions are used for the child’s qualifying educational expenses, they are typically not taxable. If one grandchild cannot use the funds, they are transferrable to their siblings and cousins without incurring taxes or penalties.
529 plans are not time-limited, so your grandchildren can take their time starting school and working through credit hours. If you planned on leaving a lump sum for your child’s college expenses, a 529 contribution might be a better way to allocate these funds. You can open a 529 account in almost any state, but some programs offer better returns and lower fees than others. It’s worth doing some research so see which state has the best plan each year.
IRS Tax-Free Gift
The IRS allows individuals to make a gift to other people up to $15,000 without implicating the gift tax. If the gift comes from a married couple, it can be up to $30,000. While estate planning, you may want to consider gifting inheritance funds to your grandchildren by paying for their college expenses, making a contribution to their 529 accounts, or helping them pay off their college loans.
Special Needs Planning and Your Grandchildren
If you have a grandchild with a disability that is expected to impact his or her ability to care for themselves, you will probably want to help provide for their expenses. There are ways to plan for your grandchild’s special needs that can be highly beneficial. However, it’s vital that you work with an experienced estate planning attorney who also understands special needs law when putting these measures in place for your grandchild.
One of the best ways to provide for your grandchildren’s future is through estate planning. You and your United Kingdom estate planning attorney can review your estate and discuss your goals for the future. At the Law Offices of Alhayat Solicitors, we are experienced United Kingdom estate planning attorneys who can help you plan for your grandchildren’s future. Please contact us online or by phone to set up a free consultation today. https://www.salvolaw.com/
