Using a trust to motivate loved ones
A lot of people are justifiably concerned about what will happen to their assets once they are passed down to their loved ones. After all, if you’re like those individuals, then you’ve worked hard to build up your estate. You certainly don’t want to see it squandered in half the time that it took you to accumulate.
That’s one of the beautiful things about estate planning. It’s a customizable process that allows you to not only dictate who will inherit your assets, but also the conditions upon which those assets will be distributed. This is why many people who engage in estate planning turn to incentive trusts.
The basics of an incentive trust
An incentive trust is a pretty simple idea. In essence, you leave assets to an individual through a trust, but you place restrictions on when those assets can be distributed. Therefore, you can use an incentive trust to motivate a loved one to act in a certain way. For example, if you’re worried that a loved one won’t remain employed after you’re gone and will instead rely on their inheritance, then you can place a condition on the trust that the remainder of trust assets will only be released upon the beneficiary’s full-time employment for a certain period of time.
But that’s not the only condition that you can place on one of these trusts. You can also have a trust pay out certain amounts until a loved one graduates college, completes a substance abuse treatment program, or gets married. In other words, you have a lot of options at your disposal when it comes to placing conditions on a trust.
Create the estate plan that is right for you
Estate planning is a custom-tailored process that is meant to suit your needs. So, if you want to learn more about what you can do to provide for your loved ones and protect your assets, then you may want to discuss your unique set of circumstances with an estate planning attorney who you can trust.