If you have a large inheritance that you want to leave to your children, but you want to make sure that they earn it and spend it wisely, creating an "incentive trust" may be a desirable option to pursue. An incentive trust is an estate planning tool in which your beneficiaries will only be able to access inheritance funds if they meet certain conditional requirements. With this type of trust, you can encourage your children or grandchildren to engage in positive behavior, rewarding them for continued growth and constructive actions.
Types of Restrictions That Can Be Set
A grantor can make an incentive trust as restrictive as they want, excluding any sort of illegal requirements. Funds can be set to pay out either in a lump sum or in smaller, consistent payments. Staggered payouts of this fashion can be greatly helpful to instill responsible money handling skills, as well as reducing the risk of a having a benefactor squander their inheritance.
To promote certain positive actions, these trusts can be set to pay out if certain goals are met, such as upon graduation from high school or college. Incentive trusts can also bar benefactors from collecting funds if they engage in destructive behavior, including drug abuse or alcoholism. One of the most popular ways to structure an incentive trust is by setting it to pay a matching amount for every dollar that a benefactor earns through gainful employment.
Contact the Law Offices of Conrad Willkomm, P.A. Today!
If you are interested in creating an incentive trust, a Naples estate planning attorney from the Law Offices of Conrad Willkomm, P.A. can help walk you through the process and provide exceptional legal guidance. Our firm has helped thousands of people create their estate plans, and we are eager to use our extensive experience to help plan for your future.
Planning for the future starts now – call (239) 262-5303 or request a free case evaluation today!