• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Parman & Easterday

Oklahoma Estate Planning Attorneys

Call Now: (405) 843-6100 |
(918) 615-2700

Attend an Education Program-Oklahoma City Area Attend An Education Program in the Tulsa Area
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • What Our Clients Say
  • Estate Planning
    • Asset Protection
    • Business Succession Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • IRA and Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Powers of Attorney
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law
    • Emergency Medicaid
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Asset Protection Worksheet
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Edmond Elder Law
        • Oklahoma City Elder Law
        • Yukon Elder Law
      • Medicaid
      • Nursing Home Resources
    • Estate Planning
      • An Overview of Estate and Gift Taxes
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s Frequently Asked Questions
      • Asset Protection Planning
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Inheritance Planning for Minors
      • IRA and Inheritance Planning
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Nursing Home Asset Protection
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Micro Webinar – Wills
    • Newsletters
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • Probate Checklist
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Probate Resources
      • Midwest City Probate
      • Moore Probate
      • Oklahoma City Probate
    • Published Books
    • Pre Consultation Form
  • Communities We Serve
    • Canadian County
      • Yukon
    • Cleveland County
      • Moore
      • Norman
    • Oklahoma County
      • Edmond
      • Midwest City
      • Oklahoma City
    • Tulsa
      • Owasso
    • Washington County
      • Bartlesville
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
Home » Estate Planning » Incentives Can Be Part of Your Estate Plan

Incentives Can Be Part of Your Estate Plan

May 30, 2023 by Larry Parman, Attorney at Law

incentive trustIt can be disconcerting to leave a significant lump sum inheritance to a particular loved one. For example, you may have a young adult in your family who has no experience handling large sums of money.

Under these circumstances, you could consider making this family member the beneficiary of an incentive trust.

Incentive Trust

To implement this approach, you would fund the trust and name a trustee to act as the administrator. Any competent adult who is willing to assume the role can technically act as a trustee from a legal perspective. This being stated, you want to engage a trustee who has the financial knowledge to administer this type of trust.

Since discretionary decisions will be made, your trustee should not have a personal relationship with the beneficiary. You do not want their objectivity to be clouded. Many people, who are in this position, will use a professional fiduciary, such as a bank or a trust company to serve as the trustee.

When you use a corporate trustee, you can rest assured that the assets will be handled in accordance with professional standards. The corporate trustee will have no conflicts of interest or heartstrings that can be tugged at. You would also have no longevity concerns. Plus, there would be inherent organizational oversight.

Valuable Guidance

Getting back to our example about a young inheritor, in the trust declaration, you could allow for living expenses and tuition to be paid while the beneficiary is in college. The distributions for expenses could be contingent upon consistent school attendance with good standing.

You could allow for a lump sum distribution at graduation. You could also include incentives that would guide the beneficiary toward graduate school. To foster a work ethic, you could instruct the trustee to match every dollar that is earned by the beneficiary going forward.

The trustee could be given the latitude to provide larger distributions when the beneficiary reaches certain age thresholds. This is just one example of how an incentive trust can be used to provide for a family member in a constructive manner. There are also many other possibilities.

As a case in point, you could use this type of trust to encourage a loved one to avoid self-destructive behavior like substance abuse. In a real sense, you can include any stipulations that you want to as long as you are not requiring the beneficiary to break any laws.

An incentive trust can be the right choice for some people, but you have to be aware of the potential for ongoing resentment. Someone who is given an inheritance with all of these strings attached may get angry and rebel. This may be highly unlikely for some people, but it is something to keep in mind.

Download Our Inheritance Planning Worksheet

We have developed an estate planning worksheet that you can use to gain a thorough understanding of the process. People who have gone through it give us very positive feedback. Therefore, we urge you to take advantage of this learning opportunity.

We are offering the worksheet free of charge currently, so you have everything to gain and nothing to lose. To get your copy, visit our worksheet download page and follow the simple instructions.

Schedule a Consultation Today!

When you work with our firm, we will gain an understanding of your objectives and provide recommendations, so you can make informed decisions. When you decide to move forward, we will apply our expertise to create a custom crafted plan that is ideal for you and your family.

If you’re ready to get started, please contact our Oklahoma City office at 405-843-6100. You can reach our Tulsa location at 918-615-2700. We also have a contact form on this site you can use to send us a message.

 

 

  • Author
  • Recent Posts
Larry Parman, Attorney at Law
Larry Parman, Attorney at Law
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
Larry Parman, Attorney at Law
Latest posts by Larry Parman, Attorney at Law (see all)
  • What Happens to Assets When Creating a Trust? - February 27, 2017
  • Are Living Wills Different from Regular Wills? - February 28, 2017
  • Why Wills are Such a Common Estate Planning Tool? - March 1, 2017

Filed Under: Estate Planning Tagged With: estate planning options, incentive trust

Other Articles You May Find Useful

Parman & Easterday
Why The Most Important Things In Life Aren’t Things
Parman & Easterday
Estate Planning for Generation X
Parman & Easterday
A TEDx Talk About Having a Good Goodbye
Parman & Easterday
Living Trusts Have Downsides Too
Parman & Easterday
3 Yearly Questions to Ask Yourself When You Already Have an Estate Plan
Parman & Easterday
Estate Planning When You’re in a May-December Relationship

Primary Sidebar

Parman & Easterday, LLP

SUBSCRIBE TO OUR BLOG

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter
  • YouTube

Where We Are

OKLAHOMA CITY, OK
13913 Quail Pointe Drive, Suite B
Oklahoma City, OK 73134
Phone: (405) 843-6100
Fax: (405) 917-7018

MAP

parman_sidbr_map

Where We Are

TULSA, OK
Memorial Place 7633 E. 63rd Place Suite 312
Tulsa, OK 74133
United States (US)
Phone: (918) 615-2700

MAP

parman_sidbr_map

Footer

footer-logo

The information on this Oklahoma Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Oklahoma City Estate Planning Attorneys at Parman & Easterday offer estate planning services in the Oklahoma City, Oklahoma and surrounding areas. Contact us for help today.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys


© 2023 American Academy of Estate Planning Attorneys, Inc.
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter
  • YouTube