You may have concerns about leaving a life-changing sum of money to a loved one that may not be prepared to handle it. There are those that have personal problems, and some people are prone to overspending. There are also younger folks with no financial experience.
Under these circumstances, you do not have to provide lump sum inheritances with no protections and hope for the best. A trust can be used to hold assets for the benefit of a person on your inheritance list, and an incentive trust can be the right choice in some cases.
Encourage Desired Behavior
Each individual has the potential to make a mark in the world. If someone finds that they do not have to do anything to live comfortably, they may stagnate, and this is something to take very seriously.
At the same time, if you have the ability to make life easier for family members, you want to lend a helping hand. An incentive trust can be the ideal solution under these circumstances.
As a case in point, Tom Glavine was a pitcher for the Atlanta Braves for many years, and he was enshrined into the Hall of Fame in 2014. He made a lot of money as a major league baseball player, and he set up trust funds for his children.
However, he did not want to take away their drive, so he included incentives. The trust would match up to $100,000 of annual income that is earned by the beneficiaries.
His daughter had expressed an interest in becoming a veterinarian. When he established the trust, he earmarked $200,000 for the establishment of a veterinary clinic. She would receive the distribution to start the clinic if she was successful in veterinary school.
Incentives can be included that would guide a beneficiary away from behavior that is self-destructive. For example, a trust could pay for substance abuse treatment, and the beneficiary could receive distributions as long as they remain in recovery.
You can create a trust with any stipulations that you would like to include as long as you are not requiring the beneficiary to do something that is against the law.
Explore Your Options
The incentive trust is one of the tools in the estate planning toolkit that a lot of people have never heard about. There are many others, so you are not constrained when you are planning your estate if you work with an attorney that can explain your options to you.
When you make the right choices, you can provide for each person that will be receiving an inheritance in the ideal manner. There are nominal legal fees involved, but in the long run, the investment will pay dividends.
Attend a Complimentary Seminar!
Since you are here, you must be looking for information about estate planning, and we have some fantastic opportunities coming up in the near future. Our firm conducts seminars that cover all the most important topics, and you can learn a lot if you attend.
There is no charge at all, and you do not have to venture out of your home to join us, so this is a great opportunity to build on your knowledge as you make a connection with our firm. You can see the dates and obtain more information if you head over to our Estate Planning Seminars page.
Need Help Now?
If you have already decided that it is time for you to work with a Westport or Glastonbury, CT estate planning lawyer to put a plan in place, we are here to help. As we have stated, there are many possibilities, and your estate plan should be customized to suit your needs.
When you choose our firm, we will gain an understanding of your situation and your objectives and help you establish a tailor-made plan that is ideal for you and your family.
You can schedule a consultation appointment right now if you call us at 860-548-1000. There is also a contact form on this site you can use if you would prefer to send us a message.
Mr. Karpe is licensed to practice law before the courts of the States of Connecticut and Colorado, the U.S. District Court for Connecticut, the U.S.District Court for Colorado, the United States Supreme Court, and the U.S. Tax Court. He is a member of the Connecticut and Hartford County Bar Associations as well as the Estate and Probate Section of the Connecticut Bar Association. In addition, he is a member of the American Academy of Estate Planning Attorneys, the National Academy of Elder Law Attorneys and Planned Lifetime Assistance Network of Connecticut.