You've worked hard to accumulate the wealth that you have and invested wisely. You want to leave that wealth to your children, grandchildren and other family members when you pass away. However, you don't want this new-found wealth to ruin their lives. You want to ensure that they use it to better their lives and the lives of others. How do you avoid the curse of "trust fund babies?"
There are ways to pass along you wealth as well as the values you hold dear to your family if you and your estate planning attorney take the appropriate steps. One way to do this is via an "incentive trust."
If you set up an incentive trust, you can provide instructions for the circumstances under which the trustee can disburse the funds.
For example, you can designate that a beneficiary of the trust receives no money unless he or she gets an undergraduate or graduate degree. You may set aside money that is only to be used for the beneficiary's children. You may choose to require that the beneficiary becomes involved in charitable work.
You may include exceptions, such as unforeseen circumstance like a serious illness or injury or the loss of a home due to a financial disaster.
There are some conditions of an incentive trust that will likely not hold up in court. For example, if someone requires that a trust beneficiary marries someone of a specific race, religion or gender, that will likely be shot down by a judge.
Remember that these are your assets and you have the right to bequeath them as you choose as long as you stay within the parameters of the law. Your Maryland estate planning attorney can help you do that.
Source: Huffington Post, "Passing Values, Not Just Money, via Incentive Trusts," Steve Cook, accessed May 31, 2017