In these troubled financial times many parents are re-thinking the wisdom of passing on an inheritance with no strings attached. Parents and grandparents still want to help give their heirs a financial boost, but now they want to pass on something else as well—the value of resourcefulness and hard work. How often have you longed for a substantial way to encourage your son or daughter to get a college degree? Or wanted to keep your grandkids away from harmful substances but felt toothless? Well now you can do either (or both) of those things with your estate plan, and something called an incentive trust.

Most parents want to provide for their children, but they also want them to lead satisfying lives as contributing members of society. During your lifetime you can support this goal by giving your children financial gifts gradually, when you feel they need or deserve it. But how do you continue to use that discretion after your death? An incentive trust helps you do just that by defining when financial gifts would be distributed from the trust, and under what circumstances. Most parents choose to give a distribution upon graduation from college, or to help an entrepreneurial child start a new business, but according to this article on APM Marketplace some grantors have even made distributions contingent on who the beneficiary marries or how much weight the beneficiary gains or keeps off!

Okay, perhaps the “Twinkie Trust” is going a bit far, but in many cases an incentive trust can be exactly what a parent or grandparent needs in order to feel good, not just about passing on an inheritance, but about passing on values as well.