You’re interested in leaving an inheritance to some of your family members, such as adult children or grandchildren. At the same time, you may be concerned about their behavior or the choices they’ll make moving forward. You want to find a way to encourage what you would consider good behavior, and you’re wondering if your estate plan could be a way to do it.
In some cases, this is certainly possible. For instance, you could put the inheritance in a trust. Once you do, you can set up certain stipulations regarding how a beneficiary can access the trust and what they can use the money for. In this way, you can give them an incentive to live in a way that you believe is best.
Maintaining their education
One example is education. Maybe you want to ensure that they apply themselves to their studies. You could set up a trust that gives them a 10% payout when they graduate high school and turn 18, but that gives them the remaining 90% only if they graduate from college. They receive an inheritance either way, but it’s much larger if they continue pursuing an advanced education—reducing the chances that they will simply drop out of school and live off the inheritance.
You could even put in a stipulation saying that they’re only allowed to access their trust as long as they maintain a certain GPA (grade point average). This ensures that they apply themselves and work hard. If they study and put academics first until they graduate from college, they have access to significantly more money. If they don’t take their studies seriously, they may miss out. In this way, you are essentially investing the inheritance in your beneficiary’s future.
These are just two examples of how you may want to use a trust, but they help to show why it’s so important to understand all the legal options at your disposal.