Incentive Trusts — Keeping a Steady Hand on the Tiller Part 2

How far can you go in using your estate to provide rewards for appropriate actions by your heirs? You’ll probably find yourself limited more by your imagination and ability to foresee circumstances than by legal constraints. Some common themes contained in incentive trusts involve education, moral and family values, business and vocational choices, charitable giving, and religious participation.

Business and vocational choices: Entrepreneurs can use trusts to provide incentives to those heirs who commit to helping carry on a family business. Trusts can be designed to encourage or discourage career choices specified by the trust creator. Trusts can also be used to offer focused financial support to those beneficiaries who opt to follow paths that are personally and socially rewarding yet generally less lucrative.

Charitable and religious opportunities: Some trusts are designed to encourage religious behavior by requiring specific observances. Some trusts provide funds for dues or other costs associated with religious participation. Some subsidize those heirs who choose missionary work or other religious vocations. Some provide matching funds for heirs’ contributions to favored organizations.

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.


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