Pennsylvania grandparents that take direct responsibility for raising their grandchildren because the parents cannot care for them due to personal problems are often faced with how to leave their grandchildren an inheritance. While writing a will seems like an easy move, wills still have to go through probate, plus other relatives might make a move for the grandchildren’s inheritance. Fortunately, Pennsylvania seniors have ways to exert greater control over their grandchildren’s inheritance.
One of these methods, according to Investopedia, is to create a trust. A trust works by moving assets like money, real estate, stocks or other valuables into it and setting conditions for how those funds are to be dispersed. You can specify that your grandchildren receive the assets at specific times in their life. If you desire, you can also specify specific uses of the money, such as to pay for college.
If you use an irrevocable trust, you do not have the option of dissolving the trust. However, once you place assets in a trust, they are no longer yours, which affords your grandchildren’s inheritance some additional legal protection. The assets are under the care of a trustee, which can include an attorney, a bank, or another institution set up to oversee the trust. Once your grandchildren are eligible to receive the assets, the trustee will disperse them for you.
While trusts afford you greater control over passing on an inheritance, they are not the only option available. The Fidelity website points out that grandparents can also include minor grandchildren in a life insurance policy. Additionally, you may name your grandchildren in your IRA as beneficiaries. Although IRAs do not have a particular listing for grandchildren beneficiaries, you can still designate your grandchildren on the IRA by their names. You may also name grandchildren as contingent beneficiaries, which would allow them to receive benefits if your primary beneficiaries, like your children or spouse, pass away.
These options are not just available to grandparents. Single parents, divorced parents, stepparents and unmarried parents all can exercise these options to pass on an inheritance to their children or other loved ones. Even if your family is broken due to divorce or drug addiction, there are still ways to help support your children after you pass away.