Are you worried about how your assets are going to be used when the time comes for them to be distributed to your loved ones? If so, you’re not alone. Many people in Connecticut find themselves concerned that their hard-earned wealth is quickly going to be spent away, resulting in their loved ones being left without the long-term support and the life that was intended for them.
Fortunately, you can use the estate planning process to your advantage here. One way to do so is to use an incentive trust.
What is an incentive trust in estate planning?
In an incentive trust, you name a beneficiary who will, hopefully and eventually, inherit the assets that you place within the trust. Before the beneficiary can acquire those assets, though, they have to satisfy the conditions placed on the release of the trust’s assets.
What can those conditions be? Pretty much anything you want them to be so long as they are legal and ethical. This gives you a lot of leeway to motivate your loved one to act in a certain way and to obtain certain life goals. You can thus trigger the release of incentive trust assets on marriage, the birth of a child, graduation from college, holding a full-time job for a certain period, or even completing a specified amount of community service.
Should you incorporate an incentive trust into your estate plan?
That’s completely up to you. However, even if you choose to utilize an incentive trust, you should recognize that it’s only a piece of your overall estate planning strategy. You may need to address other assets through various trust types, you’ll want a sound will in place, and you can’t overlook the value of powers of attorney.
So, if you’re ready to create the holistic estate plan that you need to put your mind at ease and ensure that your assets are handled with the care you want for them, then please fully consider your estate planning options before moving forward with your plan.