Newman Law Group | Trusts | Estates | Families
Blog

2 Ways to Contact
Newman Law Group
Fill Out Form| 714-795-3074

3 ways to use an incentive trust

On Behalf of | Jan 16, 2025 | Trusts

Have you ever considered making a trust for your estate plan? Much like a will, a trust can allow you to choose who should inherit your assets after you pass away. Unlike a will, a trust can protect your estate from probate, estate taxes and disputes. There are many types of trusts you can choose from, such as a charitable trust, special needs trust or pet trust.

One trust you may want to consider is an incentive trust. An incentive trust allows you to set certain conditions that beneficiaries must meet before they receive trust funds. In other words, you can limit the amount of trust funds your beneficiaries receive and help ensure they are using their inheritance for something gainful in their lives. Here are a few ways that can be done:

1. Higher education

You may want a loved one to go through college or a higher education program. You can incentivize a beneficiary to enter higher education on the promise that they would receive funds to pay for student tuition, rent, school supplies and books. You could also give your beneficiaries additional funds based on their grades. The higher their grade, the more trust funds they may access. That’s a pretty good incentive.

2. Marriage expenses

An incentive trust could give your beneficiary a motive to get married. The trust could give you beneficiary funds for certain wedding expenses, such as outfits, venue and catering. Assets may also be dispersed once a marriage is valid to give the happy couple money for a downpayment on a home.

3. Substance abuse treatment

One of your loved ones may have a substance abuse issue. You could encourage your beneficiary to stop using alcohol or drugs with an incentive trust. The beneficiary could receive funds to support a stable living as long as they remain sober.

You can explore your trust options by seeking the appropriate legal guidance — and use your money to help your loved ones long after you are gone.

Archives

Contact Form

FindLaw Network
""