Do You Love Your Grandchildren Equally?

The last several Family Legacy Planning emails have been on the topic of giving assets to your family. While we’re on the subject of family gifts, here’s a provocative question: “Do you love your grandchildren equally?”

Suppose you have a son with two kids and a daughter with four kids. If you leave $12 million to the next generation (Generation 2 or “G-2”), that’s $6 million to your son and $6 million to your daughter. When G-2 dies, and the assets flow to the grandchildren (“G-3”), each son’s child gets $3 million, but each daughter’s child gets just $1.5 million. That’s a recipe for cousin jealousy.

To send a powerful message that you love all six grandchildren equally, here’s a simple proposal. Leave your estate plan intact, but take out a life insurance policy on your life and designate the benefit to go equally to your 6 grandchildren, per capita. For example, a $1.2 million life insurance policy would give each grandchild $200,000 at your death.

Although it doesn’t erase the possibility of jealousy, it does send the 6 cousins a clear indication that you loved all of them the same.

(Credit for this idea goes to my friend Bruce Udell of Sarasota, Florida.)

Marvin E. Blum

Marvin and Laurie Blum with their five grandchildren, whom they love equally.