Inheritance for children vs grandchildren

[Anonymous]

Do people usually leave 100% of their money to their children, or give some of it to grandchildren as well?

[Anonymous]

A lot of people have set amounts for grandchildren (like 10k, 50k etc) and then their kids split the rest 50/50. I think leaving money to grandchildren is smart because money is really helpful in your 20s and 30s when you're saving for downpayments, paying off student loans and saving up to afford a baby. Oftentimes, you're already retired and have saved for your own retirement by the time your parents die.

[Anonymous]

Most just leave it to their children if they have any to give.

[Anonymous]

My grandparents left 40% to children and 60% to grandchildren. It’s not uncommon to leave some amount to both.

[Anonymous]

Anonymous wrote:A lot of people have set amounts for grandchildren (like 10k, 50k etc) and then their kids split the rest 50/50. I think leaving money to grandchildren is smart because money is really helpful in your 20s and 30s when you're saving for downpayments, paying off student loans and saving up to afford a baby. Oftentimes, you're already retired and have saved for your own retirement by the time your parents die.

This is how my grandmother's estate was handled, although I believe it was just a decision by her children (my dad, and two aunts) vs. a direct bequest from grandma. Each grandchild got $10K and it was really helpful in my late 30s as it went toward home needed home renovations. I guess technically it was a gift from my parents but they saw it as my inheritance from my grandma which made it OK with my DH to take it (he would not otherwise take $ from my parents).

My parents are also already giving fixed amounts to their grandchildren for college right now (so far $25K each) as part of their estate planning.

[Anonymous]

I think it's more common to leave to your children, with the expectation that if anything is left over they will leave to their children (i.e. your grandchildren). My parents are currently doing extensive estate planning, and they are leaving everything to us (notably, though, my brother doesn't have kids yet so it would be harder to be equitable and also leave to grandkids).

A couple of exceptions:
- My parents are immigrants from a very patriarchal culture. My grandfather explicitly set aside a small inheritance for each of his grand-daughters (highly unusual), knowing the rest would pass to his sons (no aunts on my dad's side). My dad is distributing equally to each of us, but I could see my uncle not doing so.

- My FIL is terrible with money, so DH's maternal grandfather actually left his estate to DH and his sister. He put it in the form of a trust, though, so that MIL and FIL get a fixed amount of the interest. They can't access the principle. This is a pretty unusual situation, though.

[Anonymous]

My grandfather did half to his three kids and half to the seven grandkids. Obviously each grandkid got less than each kid, but it's been great for our generation, who are buying or improving homes, paying off student loans, going to grad school, or saving for their own kid's college.

[Anonymous]

One grandmother set up mutual fund accounts for us while she was still alive. So that's how she handled the grandkids. Her goal was to not have a whole lot of un-obligated money at the end. She lived very very frugally because she had grown up so poor and wanted us all to live better.

My other grandmother gave the money to her kids. I'm not sure how it was split (one didn't have any of his own children) but I know my mom ear marked money from what she got to be passed along to my siblings and I. So she gifted me money slowly over the years (to stay under the taxable gift limit) that she says came from my grandmother.

But everyone in my family is stable and has healthy attitudes about hard work and money. So there was no fighting.

[Anonymous]

If you're of a certain wealth where you're going to exceed the estate tax exemption ceiling, it's an effective way to transfer money at a lower tax rate to ancestors. You do a generation skipping trust and the children avoid paying estate tax on those amounts. If the amount going to the grandchildren is under I think $10 or $11M, no estate tax for grandkids.

[Anonymous]

Anonymous wrote:My grandfather did half to his three kids and half to the seven grandkids. Obviously each grandkid got less than each kid, but it's been great for our generation, who are buying or improving homes, paying off student loans, going to grad school, or saving for their own kid's college.

It depends on what the elderly person wants for their money. Giving it to the generation that's in their 25-40 age range is the most beneficial in terms of bettering the descendants. They will spend the money on houses, daycare, student loans and necessities. People in the 60s and 70s that inherit large amounts of money just go on large trips.

[Anonymous]

I'm responsible for my mom's will so I gave all her money to my kids.

[Anonymous]

Anonymous wrote:I'm responsible for my mom's will so I gave all her money to my kids.

I hope you were an only child!!

[Anonymous]

My parents left their estate to their 3 children evenly distributed. Each of us (the kids) had a different number of children (0/2/3). We each could decide where that money would go. My mother was a huge believer of being fair. She had seen a few disagreements over estates and don't want that for her children.

[Anonymous]

Our trusts are set up for our kids but we have set up well funded 529 plans for all of our grandkids. Right now we are considering giving them annual gifts of $15,000 same as we do for the parents. My late parents set up a grandchildren trust which makes distributions when a GC reaches age 35 so that is something we will also consider but our GC are all very young.

[Anonymous]

My Dzhs grandmother just left all her grandkids 1M each. The remainder of her estate went to her 3 kids. It was more than 1M.