Providing direct inheritances to grandchildren requires careful planning.

When it comes to estate planning, people have different goals.

Personal values, tax laws, or family dynamics can shape these goals.

Because estate planning is multifaceted, most people do not know how to craft the documents they need to satisfy their estate planning wishes.

Attempting to do so without the help of an experienced estate planning attorney can be devastating as well as unwise.

Consider a situation described in the Yahoo! Finance article titled “Man, 72, Wants To Leave $2 Million To His Grandkids Instead Of His Son—Says His Son ‘Blew Through’ His Inheritance Already.”

A man seeks to disinherit his son after the adult child quickly squandered a prior $300,000 inheritance.

While the goal is certainly possible within the realm of estate planning, it is not a DIY project.

Need for Professional Planning

Leaving an inheritance directly to grandchildren while disinheriting children is known as a “generation-skipping transfer.”

For these transfers, the IRS applies a Generation-Skipping Transfer Tax.

This tax is added to any estate or gift taxes on the estate.

Yikes!

Although the federal tax exemption threshold may prevent certain estates from being subject to this tax, people may still be subject to state tax law.

Tax-Effective Instruments

Outright transfers to grandchildren may not be a prudent idea.

Distributing assets directly to grandchildren is oftentimes better done through a trust.

Why?

When grandchildren are young adults or minors, they may lack the financial wisdom and responsibility to manage valuable property or large sums of money.

A trust allows for greater structure and control over distributions.

With a trust, a grandparent could designate funds for grandchildren to use for certain purposes, such as education expenses or down payments on a home.

Alternatively, distributions could be tied to certain birthdays or to demonstrations of responsibility.

Experienced estate planning attorneys can establish a structured trust and guide funding it to funnel assets to grandchildren.

Trusts are often funded with bank accounts, real estate, investments, or retirement accounts.

When creating a trust, choosing the right trustee is paramount.

If family dynamics are complicated and certain family members are being left without an inheritance, then a professional trustee may be a wise selection to prevent family conflict.

Communicating Wishes for Grandchildren Inheriting

While it may simplify matters for the decedent, waiting to reveal estate plans after death generally leads to chaos for those left behind.

If a grandfather chooses not to leave an inheritance to his son in favor of his grandchildren, it is best to communicate wishes now.

Some estate planning attorneys can help facilitate these family conversations around estate planning wishes.

By communicating these plans to family in advance and establishing soundness of mind, the likelihood of a will or trust contest will be lower.

Beneficiary Designations Require Special Attention

If the grandfather has IRAs, 401(k)s, or other accounts with beneficiary designations, these must be updated.

An estate planning attorney should provide direction if the intended beneficiaries are minor grandchildren.

Because the parents may end up controlling these assets for minor children, planning is crucial to protecting the inheritance for the grandchildren.

What are Key Takeaways for Leaving Inheritances to Grandchildren?

Leaving an inheritance to grandchildren rather than children is considered a generation-skipping transfer.

This type of transfer often triggers a unique tax in addition to estate or gift taxes.

Reducing taxes and protecting inheritances for grandchildren is best accomplished through a trust rather than a will.

Openly communicating your wishes and reasoning with loved ones can prevent will contests during estate administration.

Leaving assets directly to grandchildren through beneficiary designations can have the unintended consequence of placing the funds under the control of disinherited parents.

While generation-skipping transfers are possible, they certainly require working with an experienced estate planning attorney.

This post is for informational purposes only and does not provide legal advice. You should consult an attorney for advice on any specific issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.

Reference: Yahoo! Finance (July 12, 2026) “Man, 72, Wants To Leave $2 Million To His Grandkids Instead Of His Son—Says His Son ‘Blew Through’ His Inheritance Already”