What to Consider Regarding Inheritance
One of the central issues in any inheritance is whether your total estate may exceed the federal estate tax exemptions or be subject to state inheritance taxes. As of 2021, the federal estate tax exemption for your total estate was $11.7 million per individual. The exemption increases to $12.06 million in 2022. It’s important to know that the exemption amount may be temporary, as it was set by the Tax Cuts and Jobs Act of 2017 and could revert to the previous cap of $5 million, adjusted for inflation, in 2026. New federal legislation could also lower the estate tax exemption at any time.
Best Ways to Pass Money to Grandchildren
The best way to pass money to your grandchildren depends on your circumstances and the size of your estate. There are several different ways to leave an inheritance for your grandchildren.
Preparing for Grandchildren’s Inheritance
Surprise is not the ideal option when it comes to inheritance. You should talk to your grandchildren about your plans, set expectations, and ask for their opinions. You should clarify your intentions and how you would like the money to be used (for example, for college, a first home, or a future wedding). Any potential tax implications should also be discussed, or you might ask your grandchildren to consult a tax advisor.
Conclusion
If you hope to care for your lineage through inheritance, consult a professional who can help you assess your circumstances and assets, but don’t forget to consider your grandchildren’s needs and desires as part of the process. Help them understand your intentions when you leave them money, stocks, or other property. A thoughtful and transparent plan will help you avoid conflict, confusion, and stress after your passing among the people you are trying to assist.
Frequently Asked Questions
Do grandchildren typically receive inheritances?
How can I revoke the trust fund for my grandchildren?
Source: https://www.thebalancemoney.com/willing-money-to-your-grandchildren-1695736
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