You were happy when you found out that you were going to become a grandparent. It was fantastic news, and you’re elated that your family will be expanding.
You want to do something that will help your grandchild in the future, but you’re not sure what. One thing you may want to do is to add them into your estate plan as a new beneficiary.
When major life events take place, review your estate plan
Right now, you have a major life event taking place, and it makes perfect sense to review your estate plan. In the past, you may have set your children as beneficiaries, but now could be a good time to set up a college fund, trust or to set aside assets specifically for your grandchild.
What is the benefit of setting up a grandchild as a beneficiary?
If you set aside assets in a Uniform Gifts to Minors Act, 529 plan or Uniform Transfers to Minors Act account, then you may be able to reduce your taxable estate and start planning toward your grandchild’s future education.
Many people select the 529 plan option, because this allows them to stay in control of the money until the funds are withdrawn. If you do this, you may want to set up a successor for the account in the case that you pass away.
Trusts are another beneficial support you can set up. You can add funds that are to be withdrawn only when certain requirements are met, such as reaching age 18 or getting married.
As a grandparent, you want to do what you can to provide for your grandchild. Trusts and college funds are two options to discuss with your estate planning attorney.