When creating an estate plan that safeguards your grandchildren, there are a lot of possibilities and scenarios to take into account. We can help you! Contact our estate planning attorney to learn more about the best strategies on making investments, setting up trust and creating an estate plan to include your grandchildren.
Being a grandparent is one of the greatest milestones one can reach in life. As you create an estate plan and make decisions about how to handle your money, you may want to consider ways to financially support your grandchildren. An Orange County estate planning attorney can help you make worthwhile investments that will secure a bright future for your grandchildren.
Investing while they’re still children will help you make the most of your money. You can be at ease with the knowledge that they are set up for financial success in adulthood.
Your Grandchildren and Your Estate Planning in California
It’s more expensive than ever to raise children, and rising costs of living and education mean that money doesn’t go as far as it once did. Many grandparents are in a position of financial stability that allows them to plan ahead for their grandchildren.
Estate planning lawyers can help you plan for the future, including everything from long-term care to succession planning. Working with estate planning attorneys allows you to tie up loose ends ahead of time, making things a little easier for your family when your time eventually comes.
Having an estate plan in place is essential for seniors, and it’s one of the best things you can do for your family, including your grandchildren. Instead of scrambling to settle your affairs after your death, your loved ones can simply refer to the documents you created and carry out your final wishes.
Why Make an Investment for Your Grandchildren?
While you probably aren’t the primary caretaker for your grandchildren, you can still give them some financial support. Investing for your grandchildren will give them numerous financial advantages when they grow up. There are many ways to keep money safe and out of reach until the beneficiaries reach a certain age.
Making investments while your grandchildren are still young gives those accounts time to grow and accumulate so they can use them for any expenses they face as adults. If your grandchild has special needs, they will likely need the money for healthcare and other forms of support.
When your grandchildren reach adulthood, they will have a little extra support in the form of your investments. Whether they plan to attend college or open a business—they will enjoy better finances as a result.
Working with an experienced law firm makes it easy to find the best investment strategy for your family.
Ways to Plan for Your Grandchildren’s Financial Future
As a grandparent, you can plan for your grandchildren’s future by using trusts, bank accounts, and other tools. It’s possible to share your wealth with your loved ones this way and build the foundation for a good life for them.
If you start setting aside money or property for them when they are kids, you can consult with trust attorneys and other experts to get the best outcome. Some investment options have benefits, such as reducing the taxes your loved one will have to pay.
Set Up Custodial Accounts
Custodial accounts allow you to put money and assets away in a trust or other account while your grandchild is still a minor. Each grandparent can contribute up to $16,000 per year without facing a gift tax.
Regular deposits can add up over time, creating a decent sum for your grandchild to inherit once they reach legal adulthood. When the grandchild reaches this age, they can use those funds for whatever they want.
Create a Grandparent Asset Protection Trust
Asset protection trusts are useful for keeping wealth within your family. You can add property and assets to a trust for safekeeping, and they will remain out of reach of your grandchildren until they reach a certain age or complete certain requirements.
It’s a good idea to work with a lawyer who specializes in trust funds so you can create one that suits your needs and serves its purpose. A Los Angeles estate planning lawyer can answer your questions about how a trust will benefit your family and how to handle the accounting details.
Fund a Roth IRA
It’s never too early to start saving for retirement. By creating a Roth Individual Retirement Account (IRA) for your grandchild, you can help them access all the benefits of such an account from an early age.
If your grandchild has a job, they can put money into this account and you can match their contributions. For example, they can contribute $100 a month, and you can contribute the same amount. Getting started early allows time for their investments to grow!
Set Up a 529 Plan
College is one of the biggest expenses young adults face. A 529 plan is a savings plan that allows you to save on educational costs for a child, including both K-12 schooling and college. There are two kinds of 529 plans: college savings and prepaid tuition plans.
This college savings plan has a high contribution limit, meaning you are free to add larger amounts of money to it. You can add up to $16,000 per year without incurring a gift tax or other fees. Funding a 529 account when your grandchildren are still young can remove some of the financial strain of paying for college.
The prepaid tuition plan locks in the current cost of tuition and allows you to pay for it ahead of time. Since costs are consistently going up, this is a solid option for many families. If your grandchild attends a college out of state or one that doesn’t accept this payment plan, you can get a refund of the money.
Secure Your Grandchildren’s Future through Your Estate Planning
As a grandparent, investing in your grandchildren is one of the most loving acts you can do. If you have the money to create a trust or savings account, you can help cover future expenses and ease any financial strain.
When you choose McKenzie Legal & Financial, you’ll be working with an estate planning attorney in California with over two decades of experience. Our lead attorney is also a registered financial consultant who specializes in handling money and can help you make wise investments.
Together, we can ensure you and your family have a bright financial future. For a free consultation, contact us at 562-594-4200 at McKenzie Legal & Financial today!