Grandparents raising grandchildren: Challenges and solutions

Amy Fontinelle

By Amy Fontinelle
Amy Fontinelle is a personal finance writer focusing on budgeting, credit cards, mortgages, real estate, investing, and other topics.
Posted on Sep 10, 2021

Grandparents can end up raising their grandchildren for many reasons, nearly all unfortunate. And it’s not uncommon. Nearly 2.5 million grandparents are financially responsible for the grandchildren who live with them, according to the U.S. Census Bureau’s American Community Survey.

While this heroic act can be a godsend for children whose biological parents are unable to raise them, it can place unexpected legal, financial, and logistical burdens on their grandparents.

Here’s an overview of the major challenges and possible solutions.

Legal challenges: Guardianship and custody

Grandparents who want to pick up where a parent left off may need to establish their legal rights before they can provide everything their grandchildren might need.

If the child’s biological parents are still alive, becoming their court-appointed legal guardian may solve a lot of problems. For example, you may need to be the child’s legal guardian to enroll them in school or get them medical treatment. As a legal guardian, you have the right and responsibility to make decisions that benefit the child’s health and well-being, but the parents still have custody — a higher level of control that’s harder for a grandparent to obtain.

“If the grandparents are concerned about the ability of the parents to care for the children because of abuse or neglect, they might be in a position to be awarded temporary custody of the children,” according to Evan Weinstein, a partner at Weinstein Family Law in New Jersey. “However, merely not approving of parenting decisions is no basis for grandparents to be awarded any type of rights as it relates to their grandchildren.” (Related: Keeping caregiver costs contained)

Assuming the circumstances are more dire than, perhaps, disagreements over schooling or vaccinations, then what?

If your grandchild is biological, “both biological parents have to be proven to be unfit and acting contrary to their constitutionally protected rights as parents in order for you to get custody of the child,” said Jonathan Breeden, a family attorney in North Carolina with 20 years of experience handling adoption, child custody, and divorce cases. “Keep in mind that a parent can be considered fit if they maintain contact with their kid and return when they are able to properly care for them.”

In certain situations, gaining custody may be exceptionally difficult.

If your grandchild is not biological (because they were adopted by nonbiological parents), then “you have no rights since both of the child’s biological parents previously terminated their custodial rights,” Breeden said. provides a list of resources in every state that helps grandparents raising grandchildren learn about their legal options and other forms of assistance.

Grandparents adopting grandchildren

In some circumstances, legal guardianship or custody may not provide the level of protection and care a child needs, and the grandparents may want to pursue adoption.

A kinship adoption is generally faster than a traditional adoption, Breeden said. “However, if consent is not given by one of the biological parents, the process becomes longer, harder, and more expensive.” (Related: Adoption costs and considerations)

If the parents are not alive or if the court has terminated their rights, a guardian may have an easier time adopting their grandchildren. However, the child may have to consent to the adoption if they are a certain age. Adoption law varies by state, but the age of adoption consent is usually 10, 12, or 14.

“Overall, whether you are pursuing custody or adoption, it’s important to have legal representation that is experienced in this particular aspect of law,” Breeden explained. “Not only do you want the process to be handled correctly, but you also want to do what’s best for the child and protect everyone’s rights.”

Financial challenges raising grandchildren

Finding yourself financially responsible for raising one or more children when you expected to be free of such expenses can be a major challenge. Here are some ways to address it.

If the child’s biological parents are still alive and the grandparents win legal custody, they may be able to get child support from the parents, Breeden said. “On the other hand, if they have a successful adoption, the parents do not provide child support since they are legally terminating their parental rights and responsibilities.”

The nonrefundable adoption tax credit and the refundable child tax credit can help offset adoption and child-rearing expenses. The child tax credit is available to grandparents caring for grandchildren who haven’t turned 17 by the end of the year, regardless of whether they’ve been adopted. Both credits phase out once your modified adjusted gross income reaches a certain threshold. (Related: 6 tax breaks for parents)

Making sure your new financial responsibilities to your grandkids don’t derail your retirement plans could be a major concern. Consider meeting with a financial professional to adjust your plans.

“Grandparents can deal with the financial strain by revisiting their budget or creating one to ensure they’re able to maintain their new lifestyle with the additional expenses,” said Bashar Baraz, a financial professional with Coastal Wealth, a MassMutual firm in St. Augustine, Florida.

“Depending on their situation, they can look for ways to reduce their expenditures and reallocate some of the funds for the children’s care or, potentially, look for ways to generate additional income, such as picking up a hobby or another job,” Baraz said. “While that’s not ideal, keeping retirement income top of mind will be key to allow the grandparents to focus on raising the children while maintaining their goals toward retirement.” (Calculator: How much for retirement?)

In addition, you may need to create or update your estate plan to make sure your grandchildren will be provided for if you pass away before they’re financially independent. Possible steps to take may include updating beneficiaries on your accounts and changing beneficiaries on life insurance policies, especially if your grandchildren’s parents are the named beneficiaries. It may also be worth considering a new life insurance policy. (Calculator: How much life insurance do I need?)

Additionally, you may want to consider setting up a trust. Trusts are a common way to plan for a child’s future, but they can be complicated, depending on circumstances. Many turn to a financial professional for guidance as to whether or not a trust is appropriate. (Learn more: 7 situations where a trust might help)

As well, check to see what safety nets you may be able to fall back on. If affording food for your new family is a challenge, check the USDA’s Food and Nutrition Service website to see how you can get help with meals. There are programs for seniors, children, and everyone in between. can help you find other programs your family may qualify for.

Logistical issues raising grandchildren

Depending on whether you’re still working or retired, how old your grandkids are, and your physical abilities, you might need child care. Options include care in your own home or someone else’s home, a child care center or preschool, workplace child care, or after-school care. Your local Child Care Resource and Referral agency can help you find the right child care for your needs.

Caring for young children when you’re older can be physically challenging in ways it was not when you were raising your own children. To get a physical and mental break, look into respite care. For example, Massachusetts’s free Family Caregiver Support Program is available to grandparents 55 or older raising grandchildren younger than 18.

Paying for health care is another important responsibility grandparents will want to address. You may be able to insure your grandchildren through Medicaid. If not, the Children’s Health Insurance Program (CHIP) is a state-administered program your grandchildren may be eligible for if your income is too high for Medicaid but too low to afford private coverage. Medicare does not cover dependents.

If you don’t qualify for CHIP, you can purchase a private health insurance plan or an Affordable Care Act marketplace plan. If you’re still working and you have adopted your grandkids or have obtained legal guardianship, you may be able to insure your grandkids as dependents through your workplace health insurance.

The bottom line

These are just some of the issues grandparents raising their grandchildren must grapple with. There are also a number of emotional challenges to confront, ranging from grieving the circumstances that put you in charge to coping with your loss of independence and changes in your retirement plans. (Related: Helping children cope with a loved one’s death)

Consider reaching out to a licensed therapist who can work with you and your grandchildren both individually and as a family unit to help minimize stress, tension, and conflict. Remember, too, that you’re not alone, and you can seek peer support from the hundreds of thousands of other grandparents who are in your situation.

Discover more from MassMutual…

How to make a financial plan for your family

How to help your grandchildren handle money

Meeting your financial professional for the first time


The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.