Incentives for The Heirs
Written by Christopher J. Berry, Esq. on July 23, 2008 – 1:28 am -In a recent survey, only 30% of people who have estate planning documents have outlined specific requirements that their heirs must meet to gain access to their inheritance. This is at odds with the finding that 62% of people felt strongly that each generation should take responsibility for creating it’s own wealth.
What this tells me is that people are not taking advantage of the possibilities with incentive based trusts for their children and heirs. An Incentive based trust is a nifty tool for estate planning attorneys to use that create a set of stipulations that would reward heirs for making specific life choices (and withhold inheritances for poor choices).
Some creative drafting incentives for a trust for children and heirs include:
- Encourage heirs to seek a higher education by distributing income or principle from the trust to pay tuition and supplies. Additionally, the trust could provide bonuses if a certain grade point is received.
- The trust assets could be used to match the income of an heir dollar for dollar to reward an heir for having gainful employment.
- Supplement the income for a child who works for a nonprofit or volunteers to a charitable organization
- Reward an heir for trying to start their own business.
There are many estate planning options when creating incentives in trusts for the benefit for heirs. As an estate planning lawyer working with a client, we are only limited by our creativity in drafting.
Posted in Estate Planning, Living Trusts, Planning For Young Families |
