As grandparents, we know how much you love your grandchildren. The retirement phase of life allows many older adults to spend time with their favorite young people. While they may be young now, it’s natural to be concerned about their financial future. Throughout your adulthood, you may have accrued a substantial retirement that will sustain you through the twilight years – and beyond.
As you continue to age, perhaps you’ve wondered about leaving some assets behind for your beloved relatives. Read on for some tips about the best ways to leave an inheritance (and some you may want to avoid).
Don’t Give Too Much Too Soon
Your grandchildren may be legal adults by the time you pass on, but still not have the experience to handle a large sum of money responsibly. Young adults may have unrealistic expectations of how long such a sum will last and spend too much on things that will not build equity. How many of us made financial mistakes in our early years of adulthood? You may have made some yourself, and don’t want your grandkids to follow in those footsteps.
Fortunately, there’s a way to responsibly manage this money. You can add a “Spendthrift Provision” to your Trust, which will help protect the funds from being exploited by creditors and other financial predators. You can also look into what’s called “staggered distribution” of your inheritance, which doles out limited amounts over time as your grandchildren age. An estate attorney can help you with this process and explain in more detail how it works.
Communicate Your Wishes About How To Use The Inheritance
The clearest way to communicate how you want your inheritance used is to simply say so! The most effective way to do this is to express those wishes in your Last Will and Testament. Put in writing your desire that the money be used for college tuition, a down payment for a house, starting a business, etc. This way, there is little room for miscommunication.
Avoid Prematurely Touching Your Retirement
We know you love your grandchildren – so much that you may have considered giving some or most of your retirement early, not anticipating future financial crises in your life. This can also happen if a family member is experiencing a money crisis. But in the event of an emergency, be it medical or something else, you don’t want to put yourself in the awkward position of having to ask your loved one for the money back. And even if you do ask, there’s no guarantee that you’ll get it. What’s more, giving away too much money as a gift could make you ineligible for Medicaid, and other government benefits.
We advise resisting the urge to jeopardize your future by attempting to fix someone else’s problem, no matter how much you want to. A better option would be to consider giving an advance in your inheritance, rather giving it all at once. An estate attorney can help you establish a trust in your relative’s name. You should also discuss how much money you realistically need in order to live comfortably for the rest of your life (while still maintaining a sizeable emergency fund). Any money you do give away should be down under your attorney’s guidance.
Inheritance Advice and Other Services
The Law Offices of Gary I. Handin, P.A., have been serving the residents of Broward, Miami-Dade, and Palm Beach counties for over 50 years. Our experienced attorney offers a variety of legal services to help you manage your assets and protect what matters most to you. Let us answer your questions about your will and trust. Call us today at 954-796-9600.