Any significant intergenerational wealth transfer could be subject to federal estate and wealth taxes, leaving your grandchild with a substantially smaller inheritance than you had intended.


A will or other rudimentary estate plan allows you to disburse assets to selected heirs. However, wills do not override or negate the need for probate, the costly and time-consuming process of closing an estate.

Better Alternatives to Outright Gifts

Gifting assets through a will could be a convenient and painless way to establish a legacy. However, will-based gifts have a downside, especially if you intend on transferring valuable assets, whether they be cash, stocks, or holdings. While you should always speak to an estate planning lawyer before finalizing the terms of your estate plan, you could consider alternatives to outright gifts.

Educational Savings Plans

If your intent is helping a grandchild afford the high and ever-rising costs of a college education, you could provide an educational savings plan. While there are several varieties of these plans, many grandparents establish tax-favored college accounts—sometimes called 529 plans—along with educational IRAs.

A Revocable Living Trust

This type of trust allows you to retain the right to use any assets transferred to the trust while you are still alive. Trusts have many advantages compared to traditional wills. You could, for instance, set conditions on an inheritance, ensuring that a grandchild only uses their inheritance once they reach a certain age or for certain expenses. Additionally, any assets held by a trust are not subject to probate.

A Dynasty Trust

Sometimes called a “legacy trust,” this type of trust affords you continued access to your wealth. However, unlike revocable living trusts, dynasty trusts are intended for long-term, multigenerational use and may remain valid for up to 90 years. Dynasty trusts also provide additional asset protection—a beneficiary’s creditors or former spouse cannot pursue the trust’s assets or the heir’s share.

Speak to an Estate Planning Attorney

Many grandparents want to help their grandchildren move forward in life. However, establishing a concrete legacy can be difficult if you do not account for federal taxation and unexpected life events. The Law Firm of Kavesh, Minor & Otis, Inc. has decades of experience helping California families identify and implement estate plans that work for them—plans that account for your family’s ambitions and deeply-held values. We could help you explore your best options for a comprehensive estate plan. 


Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.