WHAT DO YOU OWE KIDS AND GRANDKIDS IN YOUR ESTATE?
Jan. 2, 2018
When it comes to planning your estate, most people want to ensure that their kids and grandkids are provided for after they pass. Leaving assets to your family can help them maintain financial security, and if you are passing along heirlooms, it can preserve memories in the family, too. Sometimes, however, you might wonder how much—if anything—you are obligated to leave to your family members.
There are a few things you should take into consideration when you are drafting your trust or will. Regardless of your motivation, there are several valid reasons you may elect not to include your kids or grandkids, but you should keep the following in mind if this is the route you choose to take:
Gift Taxes May Apply
According to Time, some gift taxes may be applicable to gifts that exceed a certain cash value. This means that if you leave your child or grandchild an asset of great value. such as a home, she or he may face heavy tax penalties to pay out of pocket. This varies from state to state, but it may mean that leaving an asset of high value directly to your children is not the wisest course of action.
You Are Not Obligated to Include Kids
There is no legal mandate indicating that your kids, grandkids or any other family member must be included in your will or trust. If you wish to leave your assets to an unrelated person or to other family members, this is your prerogative, and you are free to do so. In such cases, however, it is vital that you establish a will to make your wishes absolutely clear.
Kids and Grandkids Should Be Named
If you are deliberately excluding certain family members from your estate plan, you should be as specific as possible in making your intentions known. To this end, your estate should include explicit mention of the family members so that they cannot later claim a mistake was made.