In our blog we will try to provide you with general information regarding family law, as well as updates in important cases and statutes dealing with family law in New Hampshire. This is not to be construed as legal advice. Every case is unique and small facts can make a difference.
How Estate Planning Can Affect Your Grandchildren
Grandparents are well-known for their generosity. As children, we adore and love our grandparents. In adulthood, we observe our own parents become grandparents, and we see the influence they exercise over our children. We can rest assured that whatever our sweet little darlings want, their grandparents will go to the ends of the earth to secure. Eventually, we develop feelings of envy and begin to long for the type of happiness that we wish to know when we reach their age. Consequently, it comes as no surprise that grandchildren often serve as the basis for the decisions we make regarding our wills. Grandchildren and estate planning go hand in hand with one another.
Grandchildren & New Hampshire Estate Planning
Most grandparents believe that their family legacy lies in the precious little faces that smile up at them. Grandchildren serve as living proof that a new generation is being formed, and grandparents want to ensure that the next generation receives the benefit of their hard work.
Many times, these ample resources translate to school and college tuition, fees for summer camp, new automobiles, and a plethora of full-fledged vacations and weekend getaways. It is not unheard of for grandparents to wish to bestow even more extravagant gifts on their grandchildren if the financial resources are available. For example, a grandparent may wish to provide an adult grandchild with a down payment for their first home. However, before any grandparent makes such a significant decision, there are several factors that should be taken into consideration.
Own a Business? There Are Plans For That Too
Suppose an individual owns a business. Their children are not interested in the family business, but their grandchildren are. For the owners of small businesses, having a plan for business succession is a critical aspect of estate planning. The failure to complete a business succession plan can spell financial disaster and mitigate any value grandparents believe that the business can offer their grandchildren. In addition to one’s grandchildren, having an established plan for business succession is also valuable to employees, clients, and business partners.
Avoiding Favoritism In the Family
Bear in mind that the whole family’s eyes will watch grandpa or grandma to see how they handle an expensive gift with the rest of their grandchildren. Let’s say that Bob and his wife have two daughters. After each daughter grew up, they married and had one child apiece. Eventually, the eldest daughter divorces her husband, and the man quickly proves himself to be a deadbeat father to the couple’s son. The younger daughter gives birth to her own daughter.
In this particular scenario, the female grandchild has two sets of grandparents (one on her mother’s side and one on her father’s side); however, her male cousin only has one set of grandparents in his life – Bob and his wife. Fortunately for Bob and wife’s grandson, their family is close, and no one seems to mind that they lavish extra attention and time on their grandson. It is quite obvious to anyone who knows the family that they love both of their grandchildren equally. Unfortunately, this is not always the case with all families. Not all families share the type of closeness that would prevent the giving of an extravagant gift to one grandchild and not another from affect the family’s dynamics. Grandparents who are going through the New Hampshire estate planning process should understand that there may come a time when they must defend their decision to bestow an extravagant gift or early inheritance on one grandchild and not another.
And Then There Are The Taxes…
They say that the only two certain things in life are death and taxes. Despite this bleak prognosis, there is a bright spot. Recently passed federal laws mandate that you do not have to worry about taxes unless the gifts you bestow exceed the $5.25 million mark. However, there are specific annual limitations that should be kept in mind. Any annual gift made to an individual that exceeds the $14,000.00 mark must be $14,000.00 to the same grandchild or recipient and bypass this federal requirement for tax returns; however, the moment this monetary threshold is crossed, it becomes a whole different ballgame. With that being said, a recipient is not required to report on their tax returns any payment or gift that is made directly to educational or medical institutions for monetary costs associated with tuition, healthcare, or other similar types of expenses.
Offering Flexibility For the Future
When it comes to estate planning in the state of New Hampshire, there are several different routes one can choose to take. For NH residents with custody of minor grandchildren, including a trust in their estate plan can offer the best method of ensuring that their grandchildren are cared for financially until they are able to care for themselves. A trust essentially “holds” financial assets for the recipient until they reach an age that the designator deems appropriate – rather than the arbitrary age of majority. To explore more of the options available to grandparents, NH residents are encouraged to speak with an estate planning lawyer.
Hire Experienced Representation Today!
These are just a few of the considerations you must take into account when it comes to estate planning. It is always recommended that you consult with an experienced New Hampshire estate planning attorney to ensure that the grandchildren you adore will be adequately provided for upon your passing. For a free consultation, please contact one of our skilled NH estate planning attorneys today.
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