In a general sense the role of your estate planning attorney is to assist you as you arrange your assets in preparation for distribution to your heirs after your death. But of course we don’t work in a vacuum and we understand that there is an element to your legacy that transcends dollars and cents, financial instruments, and tax avoidance strategies.
When you are taking stock of the things that you have to leave behind to your loved ones you can’t help but take stock of your life as a whole. For this reason there are those who look for ways to interject some purpose into their estate plans, and there are options that exist for these people.
One possibility is the creation of incentive trusts as a vehicle of asset transfer.With incentive trusts you place stipulations that must be met before your beneficiary receives distributions from the trust. They are often used when you are bequeathing an inheritance to younger heirs who are not yet established and have not demonstrated a pattern of financial responsibility. But you’re perfectly free to create and set up an incentive trust for any purpose that you want to and the choice of incentive is yours.
It would be possible to create an incentive trust that required a beneficiary to engage in some form of public service as a stipulation that must be met before distributions are made. This is a very general idea, but depending on the person in question, their specific career path or skill set, and your evaluation of their character exactly what you might stipulate could vary widely. The point would be to expose your loved one to a bit of “how the other half lives” in an effort to provide some perspective that could be a very useful accompaniment to a large inheritance.
An incentive trust of this nature could be one component of an estate plan with purpose, and we will share some others with you in future entries.