There are many potential ways to use a trust, incorporating it into your estate plan. One of the benefits of a trust is that it helps to retain control over your assets, even after you pass away. You can give the trustee explicit instructions for how you want the money to be handled and when the beneficiary should be allowed to access it.
One example of this is using an incentive trust, which is typically focused on giving the beneficiaries specific goals or objectives to meet. In this way, you, as the grantor of the trust, are still able to guide their behavior and influence their life and growth long term.
Positive and negative incentives
For example, you could create positive incentives that you think will help the beneficiary accomplish more in life. Perhaps you want to ensure that they take their education seriously, work hard in school and graduate from college. An incentive trust could simply be written to say that they are only allowed to access the funds within the trust once they have graduated. The beneficiary can think of it as a reward for pursuing their education, and the trustee can help make the distributions if they meet that goal.
You could also help the beneficiary avoid negative behavior. Perhaps you have a beneficiary who has run into criminal issues, such as drug offenses. You want them to put this lifestyle behind them and focus on the future. The incentive trust may state that they can get distributions annually, but that they can only take those distributions if they have not been arrested during the year. In other words, you are rewarding them for good behavior, helping to influence their choices.
These are just a few examples of how an incentive trust can be helpful, so make sure you know what legal tools you have at your disposal.