Many of my clients are grandparents who want to include their grandchildren as beneficiaries in their estate plans. Often, they hope to pass down more than just the money and other assets they have accumulated over their lifetimes. They also hope to pass down their wisdom, beliefs, philosophies, and other aspects of their legacies. Let me offer some suggestions on gifting for grandparents for all grandparents planning to include their grandkids in their estate plans.
Gifting Tips for Grandparents
Becoming a parent is amazing. Becoming a grandparent though is even more amazing because you get all the benefits of being a parent without all the responsibilities. Like many grandparents, you probably delight in spoiling the grandkids. Moreover, you hope to continue doing so throughout the remainder of your life and even after you are gone. If so, consider the following gifting tips for grandparents:
- Embrace lifetime giving alongside posthumous gifts: Incorporating lifetime gifting into your estate planning strategies can provide tax advantages as well as provide you with the unique joy of witnessing the impact your gifts have on your grandchildren during your lifetime.
- Utilize the yearly exclusion for federal gift and estate tax purposes: Making use of the yearly exclusion to make tax-free gifts allows you to transfer significant assets to your grandchildren over time, providing a solid financial foundation for their adulthood or college education. As of 2025, the yearly exclusion lets you gift up to $19,000 in assets per year to an unlimited number of beneficiaries without those gifts counting toward your lifetime exemption.
- Leave behind your legacy alongside your assets: Move beyond traditional estate planning practices by integrating legacy planning techniques into your estate plan. This empowers you to pass on more than just material wealth. Legacy planning lets you impart your values, principles, faith, and philosophies that shape your essence as well as your material assets. By weaving these elements into your estate plan, you offer invaluable guidance for your grandchildren, nurturing them toward the individuals you envision them to become.
- Maximize tax advantages and incentives: While giving gifts is undoubtedly altruistic, it is prudent to explore potential tax benefits that apply to your gifting as well. Collaborate with your estate planning attorney and tax advisor to capitalize on opportunities aligning your gifts to grandchildren with existing tax breaks and estate planning incentives.
- Avoid direct gifts to minors: Legally, gifts cannot be made directly to a minor. You can protect your grandchildren’s inheritance, however, by using a trust, ensuring assets are safeguarded until they reach adulthood, and structuring distributions to encourage responsible financial management.
- Mitigate potential disputes: Although you are free to structure your gifts any way you wish, you should also try to avoid conflicts when possible. Strive for equitable gifting among grandchildren to promote familial harmony and reduce the likelihood of probate disputes, recognizing that playing favorites could increase the risk of legal challenges to your will.
- Prioritize self-care in estate planning: Spoiling your grandchildren is certainly a grandparent’s prerogative; however, you should try to resist overextending your generosity to ensure your own financial comfort during retirement. Make sure that you can provide for yourself before making gifts to grandchildren.
- Refrain from making promises to grandchildren: Avoid commitments that may become challenging to fulfill due to unforeseen financial changes. Doing so may prevent disappointment that can lead to a strain on your relationships with your grandchildren.
By implementing these estate planning tips tailored for grandparents, you can proactively shape your legacy, fostering financial security, and familial harmony for generations to come.
Do You Have Additional Questions about Gifting for Grandparents?
For more information, please contact our estate planning office in Owings Mills, Maryland by calling 410-654-3850 to schedule an appointment.
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