When you take stock of your assets and recognize the fact that your estate is going to have a considerable impact on the lives of your heirs, it's important to consider the personalities and proclivities of each person involved.
As an example, lots of people create will planning and trusts that provide academic incentives. You may take that a step further and nurture a continuous work ethic with the confidence to match every dollar that's earned by the beneficiary in his or her own right.
There will most likely be some family members that are prepared to get their inheritances right with no strings attached at all, but you may have some nagging doubts about others.
Younger individuals who aren't based in their own right can lose their way if they find that they don't really have to gain an education and embark on a career path for financial reasons.
With these vehicles, you prepare the trust to make distributions based on specific stipulations that are intended to direct the beneficiary in the ideal direction.
As an instance, you may tie distributions from the trust to completion of a substance abuse treatment program, and add provisions for continuing distributions depending upon remaining free of the addiction or dependence.
These are only a few common examples of how incentive trusts are utilized, but you can actually create such a trust with any stipulations you decide to as long as they aren't prohibited.
There are definite reasons to tread gently and proceed with caution since you don't want your gifts to be filled with bitterness, but if you use them sensibly incentive trusts can be quite a useful inheritance planning alternative.