It can be stressful to figure out how your assets should be distributed when you pass away. This can be especially true if you’re worried that your heirs and beneficiaries will lean too heavily on their inheritances, thereby minimizing the contributions that they make to their families, communities and society at large. The beauty of the estate planning process, though, is that you can mold it to suit your needs and bring your vision of the future into reality. One way to do that while ensuring that your loved ones continue to attain life goals that you view as important for them is to utilize an incentive trust.
The basics of an incentive trust
With an incentive trust, you create conditions that have to be met before assets will be released to an identified beneficiary. For example, if you’re concerned that your child won’t complete college once they receive their inheritance, then you can specify that they aren’t to receive anything from the trust until they graduate from college.
You can be incredibly flexible here, too, to ensure that the goals you lay out are met. Incentive trusts can address everything from completing a financial literacy course to getting married, having a child, completing substance abuse treatment or even holding full-time employment for a certain period of time. You simply have to think through what you want your loved ones to achieve, then use the incentive trust to motivate them.
Customize your estate plan to build the future
You have many options when it comes to estate planning. It’s a good idea to educate yourself on each of them so that you can develop the comprehensive plan that’s right for you and your loved ones. So, if you’re ready to dive into the estate planning process, then now is the time to start reading up on which estate planning tools are suited to your circumstances and your overarching goals.