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Incentive Trusts: The Promise and Limits of "Do What I Want and I'll Reward You"

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Description

Incentive trusts are a mechanism by which the settlor tries to "incentivize" or seek to control the behavior of beneficiaries.

Settlors may want to encourage children or grandchildren to achieve certain educational milestones, maintain a job, get married or have children, or remain free of substance abuse or other risky behaviors. But there are serious limits – limits of what the law will allow a settlor to demand of a beneficiary or a trustee to enforce. There are also practical limits, including how to objectively judge a beneficiary's behavior when making distributions.

Incentive trusts are decidedly a mixed bag.

This program provides a real-world guide to drafting incentive trusts, counseling clients about their effectiveness and limits, and understanding what the law will (or won't) allow.

  • Uses and limitations – practical and legal – of incentive trusts
  • Types of incentive trusts – and rates of success or failure in achieving settlor goals
  • Structuring incentives so they can be objectively measured and administered by trustees
  • Drafting distribution provisions
  • Counseling clients about downsides of incentive trusts and alternatives

Contributors

  • John A. Warnick

    John A. Warnick is an attorney and wealth counselor in Denver, Colorado, with a national estate and trust planning practice. He is widely recognized for his counseling of high net worth families on purposeful giving, the process of not only transferring wealth but creating a lasting legacy. He is also the managing collaborator of the Purposeful Planning Institute and a wealth consultant with Family Wealth and Transition Solutions. Mr. Warnick is a Fellow of the American College of Trust and Estate Counsel and formerly practiced law with Holme, Roberts & Owen, LLP in Denver. He received his B.A. from Brigham Young University and his J.D. from The George Washington University Law School.

    Click here for more information about John.

September 8, 2023
Fri 1:00 PM EDT

Duration 1H 0M

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