Estate planning is about control and peace of mind. A lot of people don’t recognize that, and instead think of estate planning as nothing more than figuring out who is going to inherit some money and other assets like a car and a house. You’re certainly going to do that in an estate plan, but if you want to ensure that your loved ones are cared for in a way that you want them to be cared for, and you want to motivate some positive behavior, then you may want to make your estate plan a little more detailed. Let’s look at a few ways to do that.
Utilizing a remainder trust
A remainder trust allows you to place assets in a trust, have payments made to a named beneficiary for a certain period of time, and then direct the remainder of the trust’s assets to another individual. This can be especially helpful when the State’s intestate laws can steer your assets in a direction you don’t want them to go or your initial beneficiary plans on leaving their assets to someone who you don’t want to inherit.
The best examples where a remainder trust can be effective is in blended families. You might want to ensure that your spouse is taken care of when the time comes, but you also want to ensure that your biological children from a previous marriage inherit something, too. Here, you can name your spouse as the beneficiary of a trust with your biological children inheriting that remainder when your spouse passes away. This ensures that your assets won’t filter down to your spouse’s children or someone else.
The power of an incentive trust
You can also use an estate plan to motivate positive behavior. Perhaps the best way to do so is to utilize incentive trusts. These trusts, similar to a remainder trust, make payments to a named beneficiary but then don’t release the full amount of the trust to that beneficiary until an identified condition is completed. For example, an incentive trust can include a condition that requires your adult child to get married before trust assets will be fully released to him or her.
You can be pretty creative here, too. You can use an incentive trust to ensure that assets aren’t squandered away by requiring that the beneficiary maintain a job for a certain period of time, or you can force a beneficiary’s hand when it comes to dealing with addiction by requiring him or her to complete some identified form of treatment before assets will be released. Successful use of an incentive trust requires a lot of foresight, so be prepared with your vision of the future and carefully think about how estate planning can help bring that vision into reality.
Do you need guidance in creating your estate plan?
If you’re like a lot of people, you don’t give estate planning much thought on a day-to-day basis. That means that you’re probably unaware of all of your estate planning options. That could lead you to miss out on some big opportunities if you try to create your own estate plan or simply develop a basic will.
Our law firm does think about estate planning on a daily basis. As such, we know the ins and outs of the law, which allows us to give our clients the full scope of their options when it comes to estate planning. We guide them through the process, ensuring that they make the fully informed decisions that are right for them and those they care about. Then, we diligently work to ensure that our clients have the valid and legally enforceable documents they need to ensure that their assets and their loved ones are as fully protected as possible.
If you’re interested in that kind of thorough representation in these matters, then we encourage you to continue to browse our website to see what we have to offer.