A lot of people who engage in estate planning are concerned about how their assets will be managed and used once distributed. An heir might have a history of making poor financial decisions, a beneficiary might have a substance abuse or gambling problem, or a loved one simply might need a little motivation to achieve life’s milestones that you want to see him or her attain. Just because these individuals have problems though doesn’t mean that you don’t love them or want to provide for them. So what can you do?
Utilizing an incentive trust
As we’ve mentioned before on the blog, one of the best things about estate planning is that it is a highly customizable process. Therefore, if you want to place contingencies on the release of assets, there are ways that you can do that. One of the best ways is to create an incentive trust. As its name implies, these types of trusts have conditions upon the release of trust assets to a named beneficiary, and the trustee who is managing the trust is under strict guidance to ensure that those conditions are met before releasing assets.
So, if you’re concerned about an inheritance reducing your child or grandchild’s drive to succeed, then you can place a condition on his or her trust that only allows the release of his or her inheritance upon graduation from college. Or you might want your child to have a family of their own and therefore condition the release of trust assets upon marriage or the birth of a child. The possibilities are pretty endless so long as they legal.
Crafting the estate plan that is right for you
A lot of estate planning is simply knowing your options and how to utilize them. That’s where legal professionals can help. Legal teams like ours have years of experience helping families find the estate plan that works best for them so that they can rest assured that the future of their estate and their loved ones are as fully protected as possible. To learn more about what estate planning can do for you and your family, think about reaching out to a law firm that is best suited to meet your needs.