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Home » Estate Planning » Incentive Trusts: A Nudge May Be Needed

Incentive Trusts: A Nudge May Be Needed

December 14, 2011 by John Potter

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.

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Filed Under: Estate Planning Tagged With: Estate Planning, Inheritance Planning, Trusts

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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

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