Many people are concerned about what will happened to a loved one when they are no longer able to provide guidance to the loved one. However, you can build some positive structure into the lives of an heir or heirs through the creation of an incentive trust.
With these trusts, you appoint a trustee, which is often going to be a bank or a trust company, and of course you have a beneficiary who will receive distributions from the trust. You also provide guidelines that must be met for these distributions to take place; the point is for the guidelines to provide incentives toward positive behavior or away from negative or self-destructive actions.
For example, you could require an individual who has problems with substance abuse to complete a rehabilitation program before distributions will take place.
Another option would be to encourage educational achievement by providing for distributions as long as the beneficiary remains a student in good standing at an accredited college or university. You could add a lump sum distribution upon graduation, and then match all the earnings of the beneficiary dollar for dollar once he or she begins working to encourage a solid work ethic.
These are just a couple of simple examples, but you can stipulate anything that you would like to. If you are interested in potentially including an incentive trust in your estate plan, take action right now and arrange for a consultation with an experienced estate planning attorney.
Estate Planning Attorneys in Ashland, Kentucky, and Northern Kentucky.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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