Incentive Trusts: Encouraging Good Choices Through Your Estate Plan
When it comes to planning your estate, most people want to do more than just pass along money. You want to leave something meaningful—a legacy that reflects your values and encourages your loved ones to make good choices. That’s where incentive trusts come in.
An incentive trust allows you to support your beneficiaries while also motivating them to reach certain goals. Maybe you’d like to help a grandchild with college expenses, but only once they earn their degree. Or perhaps you want to encourage a child to pursue a career, build financial stability, or even volunteer in their community. With an incentive trust, you can set up distributions that are tied to these kinds of milestones.
What Makes an Incentive Trust Different?
Unlike a traditional trust that simply divides assets at certain ages or intervals, an incentive trust says: “I want to help you succeed, and here’s how I’ll support you along the way.” These trusts are highly customizable, so you can tailor them to what matters most to you and your family.
For example, you might:
- Reward the completion of a college degree or trade program
- Provide a bonus for full-time employment or a business startup
- Match savings contributions or down payments on a first home
- Offer support as long as a beneficiary remains in recovery
- Encourage charitable giving by matching donations
- Delay large distributions until a beneficiary demonstrates financial responsibility
Striking the Right Balance
The key is balance. Too many rules can feel restrictive, while too few may not achieve your goals. A well-drafted incentive trust strikes the right tone—it reflects your values without being overbearing and allows for flexibility as life unfolds.
If you’d like to explore how an incentive trust could fit into your estate plan, give The Estate Planning Law Office of Jonathon L. Petty, Inc. a call at 559-374-2223 or fill out our online form to schedule a consultation. It’s a meaningful way to pass on more than just assets—you’re passing on your values and vision for the future. We look forward to helping you get started.
