You have likely reached a point in your life where you are able to help your loved ones financially. It may give you great satisfaction to slip some spending money to your grandchildren or take your adult children out for a nice dinner with their families. Perhaps you are able to do even more, such as paying for their college educations or helping them with the mortgages on their homes.
If you hope to do similar good things even after you are gone from this life, the thought of leaving money or valuables through a will may ring hollow with you. If you are looking for a more meaningful way to distribute your assets, you may consider an incentive trust as part of your estate plan.
A versatile and valuable estate planning tool
Just as its name implies, an incentive trust awards an inheritance to beneficiaries who reach certain goals or behave in ways that you indicate in the trust. The options are seemingly endless, and, since each family member may have different talents, goals and personality traits, you may require considerable thought as you plan your trust. Some ways people in Nevada have used incentive trusts include:
- Encouraging beneficiaries to continue in the family business
- Rewarding grandchildren who complete their college degrees
- Supporting those who embark on charitable or philanthropic ventures
- Releasing portions of an inheritance as beneficiaries reach benchmark ages
Some incentive trusts can be used to keep beneficiaries on the straight-and-narrow path as well, for example by withholding funds from those who fall into drug or alcohol abuse or from those who refuse to seek employment of value.
Of course, incentive trusts contain a high level of subjectivity, which may lead to misunderstanding and resentment among beneficiaries. It is not out of the question for those you leave behind to see you as attempting to control them from the grave or prevent them from seeking their own destinies. Carefully considering each beneficiary and allowing your trustee to have some degree of flexibility may preempt some of this potential resentment.
While preparing an incentive trust may be more involved than some other aspects of estate planning, its potential to do good is enormous. In fact, if successful, your incentive trust may raise your beneficiaries to levels of success they would never have imagined.