Controlling from the Grave: Incentive Trusts

Published On: 11/05/2018

Controlling from graveWhen you accumulate a significant amount of wealth, you may worry that your descendants may not know how to deal with such a sizable inheritance. If the amount is large enough that your heirs do not have to earn a living, you may worry that they will waste away their lives in a consistent vacation mode. You may also want the money to be preserved for future generations rather than spent lavishly.

An Incentive Trust is an estate planning tool where the trustee makes distributions to the beneficiaries based on pre-determined goals or conditions. Incentive trusts are structured to motivate certain types of behavior and discourage others. 

A trust can “reward” a beneficiary for obtaining a post-graduate degree, maintaining stable employment in a certain field, buying a home in specific location, or even remaining clean and sober for a specified period. Once the milestone is met, a distribution is made to the beneficiary.

Keep in mind this type of dangling a carrot may offend your family members. People tend to resist being controlled from the grave. You must also keep in mind that certain freedoms cannot be restricted. If a restriction is challenged as violating public policy, it may be overturned.

For more information on the pros and cons of using an Incentive Trust, contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.

To learn more or get started on your estate plan, just schedule a time to visit us for a no obligation complimentary consultation.

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Post Author

Britt Stouffer

Britt L. Stouffer is a Maryland attorney experienced in Estates, Trusts, and Elder Law. With over 10 years of experience in Estates and Trusts, she has learned to appreciate how unique each client truly is. On a typical day, you will find her working on Wills, Revocable Living Trusts, Powers of Attorney, Advance Medical Directives, Tax Planning cases, Estate Administration filings, Petitions for Guardianships, Special Needs Planning, and Asset Protection.

658 Kenilworth Dr., Ste. 203, Towson, MD 21204

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