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How do you get trust-fund babies to work for their inheritance?
J. Craig Williams has the answer to this question, for those of you in this enviable position (my son's trust fund has been bequeathed to his dentist, thanks to his maternal DNA). Williams boils down incentive trusts in plain language you should definitely use with your clients:
"In other words, if you had to choose a second father, mother or guardian for your heirs, who would you pick to manage your money and transfer it to your heirs according to your wishes?"
And in lawyerly context too:
"In some ways, these trusts are a variant of an ethical will, and constitute an effort by the parents and grandparents to pass along their values to their children and grandchildren. Since very few incentive trusts have been challenged in court, there's little guidance for lawyers out there trying to put these wishes into words. Contrary to most legal documents, however, flexibility may be a crucial key to the success of the trust and help avoid litigation. Perhaps most important, choosing a strong, but flexible trustee who understands the family dynamic will allow heirs to receive the family fortune, and at the same time ensure that the heirs earn their way instead of inheriting it."
Much more here.
Posted by John Bringardner on February 1, 2006 at 01:12 PM | Permalink
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