Sound estate planning gives you a lot of control over your assets long after your gone. But estate planning isn’t just limited to who receives your assets. You can also utilize estate planning tools to try to control the behavior of your loved ones or motivate them achieve certain life goals. Probably the most effective amongst them is the incentive trust.
The basics of an incentive trust
The basic structure of an incentive trust is irrevocable. This means that once you place assets into the trust you can’t take them out. Those assets will remain in the trust for the named beneficiary. However, you can place conditions upon the release of trust assets, which can then incentivize your loved one to act in a certain way.
Incentivizing your beneficiaries
The requirements for asset distribution can be pretty wide-ranging. Some people include provisions that allow trust assets to be released upon the beneficiary’s graduation from college or upon marriage, while others require the birth of a child, clean drug and alcohol screens, or holding a job for a certain amount of time.
Not all of the trust’s assets have to be disbursed at once, either. Set amounts can be released to the beneficiary when certain terms are met, or you can provide for a type of “bonus” when the beneficiary’s behavior exceeds expectations, such as maintaining a 4.0 GPA throughout college or providing a set amount of community service hours in a given year. The possibilities are nearly endless.
Build the plan that is right for you
Death isn’t easy to think about. But you should find some comfort in the fact that your presence, support, and guidance can be felt long after your gone. Strong estate planning and the utilization of certain instruments like an incentive trust can help achieve that goal. If that’s something that your interested in learning more about, then it might be time to reach out to a legal professional of your choosing who can help educate, advise, and guide you through the estate planning process.