Could incentive trusts have a place in Michigan estate planning?

When individuals think about how and to whom they want to leave their assets in the event of their passing, many family members may come to mind. Of course, some of those family members may be children or otherwise unfit to immediately inherit large sums of money or other assets. As a result, many Michigan residents may choose to utilize trusts as part of their estate planning in order to bequeath assets on their own terms.

With incentive trusts, individuals can leave behind money or other property to parties with the stipulation that the parties meet certain terms. These terms can range from general to specific, depending on the circumstances involved. For instance, a common condition that many people utilize with trusts is that the beneficiary must reach a certain age before accessing the assets in the trust.

Another example of adding stipulations to trusts is to instruct that money should be used for educational purposes. Younger beneficiaries may use the funds to put toward their college tuition, textbooks or other related expenses, but they cannot use it for other purchases. On a similar note, the condition could indicate that the individual could receive assets in the trust if he or she maintains a certain grade-point average.

Though trusts may not be for everyone, they can come in handy for individuals who want to encourage their loved ones toward achievement while also providing benefits. Michigan residents interested in creating trusts for this or other purposes may wish to consider exploring their options for utilizing this estate planning tool effectively. Experienced attorneys could help interested parties determine whether trusts could suit their needs.

Source: investopedia.com, "Encouraging Good Habits With An Incentive Trust", Stan Murray, Accessed on Aug. 2, 2017