The arrival of a new grandchild can be a joyous turn of events. Understandably, this kind of “new addition” to a family often prompts grandparents to reflect on their legacy and how they can most effectively provide for their family’s future.
If you’ve already drafted a will, or otherwise engaged in estate planning, you know that this process can help you to better ensure that your assets are distributed according to your wishes. However, it’s important to keep in mind that a new grandchild is not going to benefit from your plan until you explicitly add them as a beneficiary in one (or many) way or another.
If you have yet to create an estate plan and you have a new grandchild, there is no time like the present to get started, and to include them in your planning as you do!
Creating or updating your will
A will serves as the foundation of most estate plans. Unless you utilize a living trust for this purpose, your will should outline how your assets will be distributed after your death. Upon the arrival of a new grandchild, it’s important to create or review your will, so that they are properly listed as a beneficiary. Absent this effort, your grandchild will only inherit a portion of your state – and even then, only under certain circumstances – if you do not have an estate plan in place at all and the state decides how your assets will be distributed.
Establishing or updating trusts
Trusts can provide flexibility and control over how your assets are managed and distributed. You may want to establish a new trust specifically for your grandchild or update an existing one to include them as a beneficiary. Trusts can help ensure that your assets are used for your grandchild’s benefit, such as for education or other important needs, and can provide for their care in a structured manner in line with your values and hopes for them.
Final thoughts
It’s also important to review and update beneficiary designations on assets that are not addressed explicitly in your estate plan, such as life insurance policies, retirement accounts and investment accounts, if you want your grandchild to benefit from these accounts. Beneficiary designations “rule” if they conflict with instructions in your will, so it’s important to keep them up to date.
Estate planning has the potential to inspire conflict if it’s not handled thoughtfully. Should you have questions about how to approach this process successfully, seeking personalized legal guidance is always an option.