Inheritance Planning Concerns

One of the first things that you have to do when you get serious about planning your estate is going to be to inventory your assets. When you do this you may come away with the recognition that you are in a position to give life-changing sums of money to your loved ones after you pass away. On the one hand this is extremely satisfying because after all, the inheritances that your heirs receive will represent your final act of giving. Knowing that these bequests will be sufficient to provide your family members with ongoing financial stability will afford you with a great deal of peace of mind.

However, there are “pleasant problems” that exist when you are in this situation. For example, what if you had a family member who had a history of substance abuse? You may recognize the fact that this individual is still in the throes of addiction when you are planning your estate. It is logical for you to be concerned about the impact a large inheritance could have on someone who was in this situation. The ready availability of financial resources coupled with the potential trigger event of your death causing emotional upheaval could be a recipe for disaster.

If you are faced with a scenario such as this you may want to consider the creation of an incentive trust. With these trusts you name a beneficiary and appoint a trustee, and you elucidate stipulations in the trust agreement that must be met before distributions from the trust are made to the beneficiary. In the case of someone with a substance abuse problem you may want to stipulate that this individual successfully complete a rehabilitation program and submit to regular testing as conditions that must be met before distributions are made.

This is just one example of how an incentive trust can be used, but you can create such a vehicle with any stipulations that you choose should you feel that you have an heir who would benefit from some guidance.

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Anthony Moccia

Anthony Moccia is an attorney and partner at The Law Offices of Kobrick & Moccia.His practice focuses on estate planning and elder law.He is a member of the New York State and Nassau County Bar Associations.He frequently presents free seminars on wills & living trusts to area residents and his seminars are said to be “informative, entertaining & easy to understand.”

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