Things To Consider Before Making Gifts to Grandchildren

Grandparents often are particularly generous to grandchildren as they see their family's legacy continuing on to a new generation. In many cases, grandparents feel they have ample resources and their children or grandchildren may be struggling financially. Assistance with summer camp fees, college tuition, wedding costs or the down payment on a first home, can relieve pressure on the next generation and permit grandchildren to take advantage of opportunities that otherwise would be out of reach. Some grandparents also don't feel it is right that children and grandchildren should need to wait for an inheritance, when they have more than they need.

Helping out family members is to be encouraged, but can raise a number of legal issues involving taxes and eligibility for public benefits, as well as questions of fairness among family members. Here are some issues grandparents should consider before making gifts to family members:

Building Your "Response Team"

By planning in advance, older adults can prepare themselves for the contingencies and consequences of living a long time by building their "Response Team" - a group of family members, friends, physicians and lawyers - who are informed about your wishes and can carry them out as directed by you. While there are many reasons to build a Response Team, one of the most important reasons involves responding to our rapidly changing system of health care.