“Incentive to Work”
Can Be Built in to Your Plan
From time to time, clients express some concern that younger generations may not be motivated to work and earn money because their inheritance may give them no reason to work. Leaving assets in trust has many benefits. One of these benefits is that it provides an opportunity to build in a substantial incentive for the beneficiary to work.
You can provide that the loved one will receive a matching distribution from his or her trust for the amount of money they earn in a year. So, if they earn $45,000 annually, the trust can “match” that sum so the beneficiary earns $90,000. You see, with this structure . . . there is an incentive to work. As the beneficiary earns more, they will actually get more from the trust.
Little things like this can have major effects to shape the course of a loved one’s life. This is the kind of control that can encourage loved ones to be a productive and contributing member of society. The more they contribute, the more the trust contributes. Aligning interests and values in this manner can be quite beneficial for loved ones in the future, if done right.
Mark F. Winn
Attorney at Law, PLLC