OKLAHOMA CITY – Many parents fear that once their children get an inheritance, they will waste the money or make them lose their work ethic.
Experts say if you want to prevent that from happening, an incentive trust is an option to consider.
An incentive trust is an estate-planning tool that is designed to help prod your heirs in a direction even after you’re gone.
With the trust, some or all of your assets are passed to the trust when you die rather than your heirs. Your trustee is empowered to distribute funds from the trust only if and when your beneficiaries do whatever is specified in your trust.
However, a poorly constructed trust can have a high-risk of unintended consequences. They will also cost between $2,500 and $5,000 to draw one up with an attorney.
Also, some specifications can be struck down in court.