Are you worried that leaving an inheritance is going to cause your beneficiary to stop working? Maybe you’re leaving them enough money that they could instantly retire. You’re happy to be able to provide this type of financial security, but you’re worried that they are going to abandon their career.
Fortunately, there are some steps you can take to make sure this doesn’t happen. For instance, you could use an incentive trust so that your beneficiary will continue working hard in their chosen career for years or even decades to come.
How does an incentive trust work?
With an incentive trust, you can pick goals and the trust is meant to incentivize your beneficiary to achieve those goals.
For instance, if you just left them millions of dollars, they may quit their job. This is why many wealthy people refuse to do so.
But you could set up a trust that holds the full balance of that inheritance. Then, you could authorize the trustee to make annual payments. These payments are only authorized if the beneficiary is still employed. If they quit their job, they get nothing.
Another option is to connect the payments to the beneficiary’s income itself. If your beneficiary earns $100,000, they get another $100,000 annually from the trust. If they stop working and earn zero dollars, they don’t get anything from the trust. This incentivizes them to work hard to increase the distributions.
These are just a few ways that a trust can be used to achieve your goals. Take the time to look into all of the necessary legal steps. To learn more, call the Quinn Law Firm at 814-833-2222.