If the grandparents are wealthy, it is easier for the children to ask for money, but the situation still can raise issues, says Robert Hayden, co-founder of Total Alignment Wealth Advisors in New York City and an expert in trust and estate planning. Total Alignment serves mostly high-net-worth families.
“There can be an issue of fairness if the grandparents are giving more to some grandchildren than to others,” Hayden says. “That can be solved by setting up trusts with specific guidelines.”
The other issue is the tax that is imposed when money goes to a third generation rather than to children. Taxes must be considered in gift and estate planning, Hayden says.
