As a parent, you likely go to great lengths to protect your children. While you want the best for them, you also understand that as adults they make their own choices, some of which you may believe to be harmful.
Despite potential setbacks or challenges in your children's lives, you probably want to designate your assets to them in the event of your incapacitation or passing. But how do you leave your assets to one of your kids who's struggling with a drug addiction, without contributing to their disease?
You can specify milestones through an incentive trust
While designating your assets, you might wish to consider specific stipulations in hopes of protecting your child from the temptations that may come along with receiving a large sum of money. An attorney experienced in estate planning can help you establish an incentive trust for your son or daughter to allow them to gain access to their inheritance based on reaching specified milestones.
Rather than disinheriting your child because of their struggles, you can provide assets to them based on their recovery. For example, you might consider distributing a portion of the trust upon the completion of specific milestones specific to your child's needs.
Milestones listed in your incentive trust may include:
· Completing a drug or alcohol rehabilitation program
· Earning a degree
· Establishing an employment record
· Maintaining sobriety for a set period of time
While doing your best to provide for your child, you likely understand addiction is extremely difficult to overcome. Designating your assets through an incentive trust can encourage your child to get the help they need without further endangering them. But if they are unable to meet your requirements, you may be able to help someone else in need of recovery.
You can designate an alternate beneficiary in case milestones are unmet
You can also include provisions for alternate beneficiaries if your child is unable to meet your requirements. Perhaps you would consider naming a rehabilitation program or charity near and dear to your heart to know that after you are gone, you are still making a difference.