Can I Use a Trust to Benefit Unborn Grandchildren?

 Posted on December 24, 2024 in Estate Planning

Grandparents often want to leave a gift directly to their grandchildren in their estate plans. Your gifts to your grandchildren are a part of your legacy. Giving what is called a class gift - a gift left to a particular group of people - allows you to divide money equally between your grandchildren. If you plan on leaving a gift for your grandchildren in your will or trust, you may want to consider the possibility that some of your grandchildren could be born after you have become incapacitated or after you have created an irrevocable trust. In these cases, you cannot change the language of your trust to individually include the new grandchild, even if your intended for all of your grandchildren to receive gifts from you. A knowledgeable Glen Ellyn, IL estate planning attorney can help you create trust that accounts for this situation.

Understanding Class Gifts 

A class gift is a gift made to a distinct and defined group of people. Class gifts can be left to groups such as "my grandchildren," "the members of my knitting club," or "my surviving siblings." You can define the class using the terms of your trust. You would then set aside money or property to be distributed to the members of the class. For example, your trust might set aside "$10,000 to be divided equally among my grandchildren." This method is more protective of your grandchildren who will be born in the future than naming each individual grandchild you have now. If you were to state, "$2,500 each to Billy, Sage, Lisa, and Thomas," then grandchildren who are born later would not be included.

Explicitly Including Grandchildren Born in the Future 

If your goal is to also leave a gift for grandchildren who may be born after you create an irrevocable trust or after you become incapacitated, you can state this explicitly in your trust. Many people use language such as, "to my grandchildren, including those born or adopted after the creation of this trust." This language clearly tells your trustee that distributions should be made to grandchildren who were not yet born or adopted when your trust was created. If you are using a will, you can make similar provisions to help the probate court understand who you meant to include among your grandchildren.

Contact a Glen Ellyn, IL Estate Planning Lawyer 

NN Legal Group is committed to helping people protect their loved ones through careful estate planning. Our experienced DuPage County, IL trust and wills attorneys will do all we can to ensure that all of your grandchildren will receive the gift you meant for them. Contact us at 630-474-0925 for a complimentary consultation.