GRAND Magazine - September/October 2016 - 35

ask dr. gramma karen

CONNECT WITH GRAND

Are your grandkids in your will?

A
Must--‐Read
for
Grandparents

BY KAREN L. RANCOURT

few months ago I invited Coventry EdwardsPitt, the author of the book Raised Healthy,
Wealthy & Wise: Lessons from successful
and grounded inheritors on how they got that way,
to be a guest blogger for my bi-monthly advice
column, on Mommybites. Here are are highlights
from Covie's post, "Guidelines for Planning Children's
Inheritances."

Leaving "small" gifts outright
to grandchildren

It should be noted that coming into money, even a relatively "small" amount of money, at a young age can have
a serious impact on a maturing adult's ability to find their
own footing and become financially self-sufficient. Access
to ready capital can have the damaging effect of robbing a young adult of the economic necessity to struggle
through the early, uncomfortable, confusing years of
their early work experiences. To avoid this problem, it's
best for grandparents to leave even relatively "small"
amounts of money to their grandchildren in a trust.

Leaving bequests in trusts

My advice is for grandparents to consult their
grown children to hear their preferences
about how they would like the trust
designed for the grandchild. It's important for the grandparent to make
sure that any trust they design
will work in such a way that
reinforces and supports the
planning your grandchild's
parents have done, or
have in mind.

Paying school tuition

If grandparents would like to make gifts to their grandchildren during their lives, they might consider paying
for their grandchildren's schooling. Payments of tuition
directly to a school - primary, secondary, and/or college
or graduate school - do not count as gifts from the perspective of the gift tax that the grandparents would owe,
but they do reduce the size of the grandparents' estate
that will be subject to estate taxes.

Bypassing the grandchild's parents

Another idea grandparents and parents may want to
discuss is whether the parents would like their inheritance
to bypass them and go directly to their grandchildren in
trust. This has the benefit of saving estate taxes on those
assets upon the death of the parents.

Gifting with love

The driving motivation behind any grandparent's wish to
give is love. With the right planning, grandparents can
avoid the unintended negative consequences and set the
stage for their gift to have the best lasting effect in the
lives of their grandchildren.

SEPTEMBER OCTOBER 2016

"This
book...set
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"Karen
identiﬁes
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--‐
Amazon.com
Reviewers

Karen L. Rancourt, Ph.D., Karen L. Rancourt,
Ph.D., writes an advice column for parents
and grandparents at Mommybites.com and
is the author of Ask Dr. Gramma Karen,
Volume II: Savvy Advice to Help Soothe
Parent-Grandparent Conflicts.
35 GRAND

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Table of Contents for the Digital Edition of GRAND Magazine - September/October 2016