Grandparents and estate planning - what you need to do

2/10/2014

While the birth of a grandchild is certainly a time to celebrate, it also means it's time to look at your will and factor your new family members into your estate planning.

Here are a few of the issues you should consider when updating your will for the latest bundle of joy.

Consider your goals

Estate planning might seem simple - after all, you're just making sure ownership of a part of your wealth and property passes to your grandchildren in an orderly and fair fashion.

But you need to think about what you want them to get out of their inheritance. Do you want to leave them the capital to set themselves up financially or start their own business? Or do you want to leave them enough to put them through an expensive private school? You might even want them to be able to travel.

Whatever the fact, you'll need to budget for it.

Appoint a trustee

Even once you've set aside an adequate monetary value for your grandchild, they won't be able to control or own the estate until their 18th birthday at least - and in fact, it's often recommended that they be older before being granted control.

You'll have to choose a trustee to wield the inheritance as you see fit until your grandchild is mature enough to take control. This can be anyone from a trusted family member or friend to a lawyer.

Choose a testamentary guardian

If you're a guardian to your grandchildren, this is especially important. A testamentary guardian will look after your grandchild after you die, though there's no guarantee they will live with this person. They will only take over guardianship of your grandchild if the parents are incapable (due to death, most commonly) and if there are no Family Law Court orders indicating who the child is to live with.