Grandparent Wills
Posted: 9 October 2019
Grandparents often want to give some financial assistance to their grandchildren and great-grandchildren. There can be a number of good reasons for making specific provision for grandchildren in your will or through a family trust. The traditional will-drafting practice is for parents to provide for each other and then when both of them have died, they provide for their children, on the assumption that their children will then in turn acquire assets and provide for grandchildren and great-grandchildren.
First, there is often, in practice, no such provision for grandchildren and great-grandchildren by will-makers. In many cases, the will-maker’s children receive their inheritance and either spend it or provide for their partners or spouses. Little, or sometimes nothing, trickles down to grandchildren and great-grandchildren.
Secondly, it is now common for people who die in their 80s and 90s to have adult grandchildren who can make very good use of an inheritance to buy a property, establish a business or clear a student debt.
Thirdly, specific provision for grandchildren often comes as a very pleasant surprise for a grandchild. It can create a real bond and sense of belonging between grandparent and grandchild.
If you are a grandparent and would like to provide for your grandchildren by will, or through a trust, the following points should be taken into account.
Specific amount?
Should the gift be a specific monetary amount? If so, how much? Alternatively, a share or percentage of the residue of your estate can be left to your grandchildren. Changing circumstances and changes in the value of money can make important differences.
Maybe establish a trust?
It is possible to establish a trust fund for grandchildren through your will. Instead of giving grandchildren a lump sum, the funds are set aside for their benefit when you die. This should ensure that the funds remain safe from a grandchild’s creditors or partners if a relationship breaks down or a business fails.
Good for trustees to have flexibility
It is best to give the trustees of your will sufficient flexibility to authorise the early release to grandchildren of part of the funds for specific purposes such as the costs of surgery, a wedding, purchase of a property, travel and so on.
Letter of wishes as another option?
Another option to consider is a letter of wishes, or memorandum of wishes, to be held with your will. In this document you can set out your wishes in relation to the gift to your grandchild and give indications as to how you may wish to see the funds be used. These letters or memoranda can be changed from time to time.
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