Grandpa and Grandma have a trust, a pour-over will, and a life insurance policy on Grandma’s life. Their four adult children are equal beneficiaries under all. If you were G-pa and G-ma, who would you designate as beneficiaries in case one of the adult children predeceases you: that child’s children (your grandchildren) or the other adult children? Three of the adult children have children (three adult sons, two adult daughters, two adult sons and one adult daughter, respectively). I don’t know what the plan is in the real-life situation on which this question is based; I’m just curious as to people’s opinions. Thanks.
child’s children (grandchildren). Seems fairer than cutting off one branch of the family completely because that child/parent died.
What do you think/hope for, @rosered55?
That child’s children. I had two deceased siblings, but only one had married and had children. I split the proceeds - such as they were - between his remaining children. It seemed the right thing to do, and what he would have appreciated.
I hope that the grandchildren are the residual beneficiaries.
Per stirpes, so the grandchildren get to share their deceased parent’s portion. The other way is a definitive exclusion of that group of grandchildren; not sure one wants to disown them just because a parent dies…
My trust is set up that way; my dad’s will has that sort of verbage as well.
MIL has divvied things up a bit differently - some to me, some to my kids. My late DH was her only child.
Our trust is set up that way and we don’t even have grandchildren yet. If we do have them eventually and they outlive their parents but one of us is still alive, the grandchildren will inherit the parental portion, divided among them.
I vote for the grandkids too.
I would leave it to the grandchildren. If there were no children and there was a spouse, it would be trickier. Let’s say you were leaving that money to your son. If your son dies before you, would he have wanted you to take it away from his spouse and give it to his siblings - or vice versa? This is where we will be rolling the dice. I am thinking half to surviving spouse and half to surviving siblings. Even that seems a bit mean to the spouse so I’m not sure.
My mother died before her father and when he died several years later my uncle inherited all. My grandfather had had a will that would have left things to grandchildren in case one of his children died but he changed it about 10 years before when he was upset with one of uncle’s children! There wasn’t a lot of money involved but it hurt just the same and I know my mother would have been devastated. There go all the family photos too. Uncle is estranged from his children so his new wife will inherit everything and then leave it to her dogs. Be careful with your estate planning!
Yep. The grandchildren.
Also, if you have a very large estate, be careful about grandchildren, great grandchildren, etc. There is a story out there about someone using long ago frozen embryos to have a child that will have a claim on some giant estate when the bio parent who is connected to this estate is long dead and the former spouse has remarried. That’s terrible.
I think the grandchildren – but know that my parents have handled it the other way (all to remaining siblings, nothing to one grandchild of deceased son). There are some extenuating circumstances (grasping, litigious behavior by grandchild’s other parent after the death of the son). Grandparents do not want remaining siblings hassled by the grandchild’s other parent, so have specifically cut grandchild out of will. Grandchild found this out a couple of months ago when one grandparent died; if you are specifically mentioned as NOT receiving anything in the will, which is best if that is exactly what is intended, then the cut out person gets a copy of the will. I don’t think my parents had thought through that one of them would likely still be alive when she found out. Grandchild is in her mid-twenties, lives literally on the other side of the world now and has not seen grandparents in almost 10 years.
There is more to the story than this – some animosity on part of grandparents to some behavior by grandchild when grandchild was young and influenced by the other parent. I personally think my parents are wrong in this and have said so, but to no avail. But I also think that if the other parent hadn’t behaved so badly when her daughter’s dad died, the grandchild would likely still be getting something. And my parents’ estate is much larger than their son’s was. The other parent was penny wise and pound foolish. She fought over the son’s estate, and got her kid locked out of the bigger estate down the road.
I am just trying to stay on good terms with the grandchild through all this…
Inlaws stuck with the bloodline. So…grandchildren…no inlaws.
You probably already know this, but there’s a generation skipping tax if you try to leave money directly to the Grand children. I think you’re safe with the trust, but I’d check on assets outside the trust.
You’re probably OK with the insurance policy, too, but I’d check on anything else.
Here is some info on the generation skipping transfer tax (Wikipedia, I know, but a pretty readable version):
https://en.wikipedia.org/wiki/Generation-skipping_transfer_tax
Per stripes is a standard practice, I believe.
Per stirpes, but if my kid had been married long enough that their spouse was truly a part of the family, I would consider including the spouse of my kid before the grandchildren
https://en.wikipedia.org/wiki/Per_stirpes
Pretty interesting.
Not sure what you mean here, but I would think it would be reasonable to take into consideration the circumstances and maybe make special, conditional arrangements.
Definitely bloodlines. But I could see carving out a smaller lump for surviving spouse depending on length of marriage.
Another vote for per stirpes . . . (at least that’s what I plan to do).
Per stripes is the standard. That’s what most lawyers would put in unless you specifically ask them to do otherwise.