The only joy greater than becoming a parent might be the excitement of becoming a grandparent. When this monumental event occurs, you naturally want to shower your grandson or granddaughter with love and affection, but more importantly, you want to provide her or him with the security and financial stability needed later in life. Adding your grandchildren to your will is one of the most effective ways to provide for them.
There are several essential principles you should keep in mind, though, when updating your will to include the newest addition to your family. Follow these three tips to ensure your grandchildren enjoy the benefits of an inheritance without any of the potential legal or financial drawbacks:
Do not give a large lump sum
According to CNN, the average inheritance in America is $177,000. You might not leave an amount this large to your grandchildren, but you will likely leave at least several thousand dollars. To a young person, that can seem like a huge amount of money. As such, if teenagers receive such an inheritance in a single lump sum, they might blow through it quickly.
Indicate how inheritance should be used
Grandchildren might similarly use inheritance frivolously if there is no indication of how you intend for it to be spent. You might, for example, stipulate the sum be spent on a college education, a down payment for a home or another sensible investment that serves their future. This can ensure the funds achieve exactly what you want: security and opportunity.
Include an age stipulation
It is a common mistake to not include an age stipulation when adding grandchildren to a will. They may be ineligible to receive it before they are 18, but you may even stipulate you want the inheritance to be distributed when they are older. This may give them time to plan how to use it wisely and effectively.