Navigating Guardianship and Financial Planning When Raising Grandchildren

When you’re raising your own children, you’re probably still working, and you may have years left in your career after they leave home. If you’re a grandparent raising grandchildren, the situation is different, and there are factors you’ll need to consider that probably weren’t issues for you as a parent. Here are a few things you’ll need to address.

Reach out to Farm Bureau to work with an insurance agent who can answer your questions, from how much life insurance you need to whether a grandchild can be added to health insurance.

Should You Be a Guardian or Adopt?

You’ll need to decide whether grandparent guardianship or adoption is the best option for your family. 

Guardianship

Becoming the legal guardian of your grandchildren is usually the better choice if it seems likely that the parents will be able to care for their children again in the future. It may be better for everyone emotionally to expect this outcome. While there are legal and court fees involved, it’s typically less expensive than adoption.

Adoption

If the parents have died or aren’t expected to ever be able to care for the children, adoption may be the right option. Adoption can be expensive, although costs may be lower if the parents agree to it. You may qualify for federal tax credits for adoption expenses. 

Review Your Financial Plan

You’ve already been a parent, so you know it can be expensive to raise children. The money you’ll spend caring for your grandchildren may mean you have to save less, change your retirement date, or adjust your lifestyle.

You’ll want to estimate the cost of clothing, food, supplies, extracurricular activities, and everything else you’ll need to buy for your grandchildren. Run the numbers to see how it will fit in your budget.

See if There’s Money Available

There might be ways to offset some of the costs of raising your grandchildren:

• If you have guardianship of your grandchildren and their parents have funds available, you may be able to collect child support from them.
• If one or both of your children’s parents passed away, find out if they have life insurance policies. The children may be beneficiaries.

Check with your human resources department to see if you have benefits that could cover adoption expenses or childcare costs.

Adjust Your Relationship

As a grandparent, you might have been more focused on fun and splurges. But when you shift to raising your grandchildren, you need to reframe your spending in terms of both your budget and the values you want to instill in them.

When you’re not their parent, it’s easier to buy them the toys and clothes they want and to pay for activities. When you move into that parental role, you’ll probably find yourself turning down their requests more often as your budget shifts. 

A Financial Pro Can Help

Maybe you’ve been concerned that you might end up raising your grandchildren. Or perhaps your situation changed suddenly after an unexpected event. Whatever the circumstances, you probably have a lot of questions. 

At Farm Bureau, we can help you find the answers. Reach out to an agent today for a consultation that can help make this transition a little easier.