Grandparents in Michigan can leave an inheritance to grandchildren if they so choose. A Michigan estate planning attorney with our firm at The TGQ Law Firm in Ann Arbor describes grandparents’ rights and limitations when leaving money to grandchildren. For more information, contact us at (734) 224-3380 or schedule a free 15-minute consultation with an estate planning attorney.
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Grandparents Have the Right To Leave Money and Property to Their Grandchildren Without Interference From Parents
When considering leaving money to grandchildren, many grandparents wonder if the parents will have access to the funds willed or gifted to their grandchildren. The parents might not have the best record for managing their personal finances, and grandparents might want to ensure their grandchildren will inherit and be able to use their inheritance appropriately.
Grandparents can leave assets to grandchildren using any of several available estate planning tools, including:
- Naming the grandchildren as beneficiaries in a will, especially to receive certain family heirlooms
- Creating a trust and naming a grandchild as a beneficiary
- Creating a custodial account for a grandchild
- Naming grandchildren as beneficiaries of retirement, investment, and bank accounts transferrable on death
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Limitations on What Grandparents Can Leave to Their Grandchildren
Estates with a value below $12.92 million in 2023 ($25.84 million for married couples) qualify for the federal estate tax exclusion. Additionally, Michigan does not levy a state inheritance or gift tax. While the federal gift tax applies for gifts over $16,000 to an individual in a calendar year, gifts under the limit do not incur the federal gift tax.
Don’t forget that a will goes through probate before distribution to named beneficiaries. Your children and grandchildren may not receive their full inheritance if the court uses certain estate assets to pay your final expenses, taxes, and debts. While there are additional costs to creating a trust, a trust will bypass probate.
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How Can Estate Planning Attorneys Help With These Issues?
When planning your strategy for leaving money to grandchildren, stuffing it under the mattress or a hand-drawn map in a safety deposit box are your least viable options. Instead, scheduling a consultation with an experienced Michigan estate planning attorney can help you understand your choices to create a generation-skipping inheritance for your grandchildren.
Estate planning attorneys dedicate their time to studying the assets in an estate and helping someone determine the best way to protect those assets from creditors while leaving their family able to pay their final expenses. Most people choose to transfer the assets they wish to leave for an inheritance into a trust for several reasons, including:
- Being able to require a grandchild reach a certain age before distributing assets
- Bypassing probate so the court and creditors can’t access certain assets
- Leaving some decisions up to a surviving trustee
- Adding a spendthrift provision to pay an allowance from the trust
- Having a lawyer review the terms to ensure clarity in the trust instructions
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Avoiding Disputes Among Family Members Over an Inheritance Left to Grandchildren
When you consider leaving an inheritance for your grandchildren, some family members may not understand your reasoning and could feel hurt, disappointed, or angry. Never leave your intentions for inheritance as a surprise. Instead, meet with your family members and explain who should expect to receive certain assets.
Creating an estate plan without discussing it with your children and grandchildren can leave some family members feeling resentment toward you for not considering their needs. Describe for your grandchildren your intentions in leaving them certain assets. Do you hope that they’ll use trust funds to attend college? Do you want them to inherit the family business?
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Contact Our Michigan Estate Planning Law Firm To Schedule a Consultation
When leaving money to grandchildren, there are several factors to consider. Speaking with an estate planning attorney serving Ann Arbor, Michigan can help you determine the best path forward to leaving an inheritance for your grandchildren.
Contact us at (734) 224-3380 to discuss leaving money to grandchildren in your strategic estate planning documents. You can also schedule a 15-minute no-cost consultation to get started on creating an appropriate estate planning strategy to suit your needs.
Disclaimer: This article is not intended to be legal advice. Everyone’s situation is different and legal advice is only properly given after having reviewed your specific situation.
