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Home » Estate Planning » Should you be using an incentive trust in your estate plan?

Are you worried about how your loved ones are going to manage their inheritance once you’re gone? If so, then you’re probably looking for estate planning vehicles that protect both your loved ones and your estate. One option at your disposal is the incentive trust.

The basics of an incentive trust

With this estate planning tool, you place assets into a trust for the benefit of a named individual. Although specified amounts may be paid out of the trust to the named beneficiary, the remainder of the trust’s assets is only released once a triggering condition is met. You, as the trust’s creator, specify what that triggering event is.

The restrictions that you can place on an incentive trust

You can be creative with an incentive trust. If you want your loved one to graduate college before trust assets are released, then you can specify that in your estate planning documents. Other conditions that you can place on this type of trust include the following:

  • Keeping a job for a specified period of time
  • Getting married
  • Having a child
  • Completing substance abuse or gambling treatment
  • Completing anger management classes
  • Reaching a certain age

Again, you can be creative here, so carefully think about what sorts of conditions you want in place to ensure that your assets are protected while your loved one is motivated to act in a way that you see fit.

Create the estate plan that is right for you

Estate planning is a customizable process. That means you can tailor it to suit your needs. But in order to successfully do so, you need to know what you want and how your estate planning options can get you to where you want to be.