June 2012


Ask a trust officer:

Problem heir


DEAR TRUST OFFICER: I expect to leave generous inheritances to my grandchildren. All of them except ďAlanĒ have families and careers and will, I believe, make good use of the money. Alan, unfortunately, lacks motivation. Last year he quit college and moved back in with his parents. He doesnít express any interest in a career or his future. Other than disinheriting Alan (which I surely donít want to do), is there any way that to make sure that an inheritance wonít reinforce his lack of motivation?óCONCERNED GRANDMA


DEAR CONCERNED:You might consider establishing an incentive trust for Alan in your will to allow you to attach conditions to his inheritance.


For example, you can specify that the trust distribute only a limited sum to Alan initially, requiring him to achieve certain goals that you believe are important (obtaining a degree, pursuing a professional career) in order to receive more. You can structure Alanís inheritance so that he receives money from the trust only at certain ages, with the final payout coming at a time when he has reached financial maturity.


An incentive trust canít guarantee that Alan will achieve the goals that you want him to pursue, if he doesnít believe in those goals himself. But the trust can provide positive reinforcement, and it can protect the assets from being squandered.


Do you have a question concerning wealth management or trusts? Send your inquiry to tormey@pgbank.com.


(June 2012)

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