Do you ever worry that your heirs are not going to use the assets that you leave to them in your estate plan in a manner that you would approve of?
For instance, perhaps you have an heir who has always had trouble saving money and tends to make frivolous purchases. You want to leave them assets, but you also want to protect them from themselves. Are there any ways to do this?
A trust allows you to create your own guidelines
There certainly are tactics that you can use to protect your heirs, and the key is to know how to use trusts to your advantage.
For instance, an incentive trust allows you to set up specific requirements that the beneficiary has to meet in order to get the money within that trust. If you are worried that your heir is going to quit their job and just live off of your money, the incentive could simply be that they have to stay employed for the entire year, and the money that they get is equal to how much they’re paid. This way, you can leave them money without worrying that you will jeopardize their career.
Another option is to pick a specific thing that you want the money to be used for and put it in a trust designed with that purpose in mind. Perhaps the most common example is creating a trust to pay for a college education. You may be worried that your heir is going to waste that money and not be able to afford college, but by stating that they can only use the funds for tuition, books, room and board, and other such expenses, you give yourself a way to leave them money so they will use it in a productive fashion.
As you can see, there are a lot of estate planning options that can accomplish your goals, so make sure you consider them all carefully.