One concern that people have when leaving a substantial inheritance is that their beneficiaries aren’t going to have any incentive to work. They are going to quit their careers or lack motivation to be the best they can be.
For example, maybe you have an adult child who is excelling in the tech industry. But you know that you’re going to leave that child around $10 million. If they wanted, they could drop out of the workforce and just live off of the money. But you don’t want to give them that option and risk ruining their career or their drive to succeed. Is there any way to address this?
You have two main options
There are many options, the first of which is just to leave your adult child a much smaller inheritance or to give your money away to charity. You can find many wealthy individuals claiming that they don’t want to leave their full wealth to the next generation. They’re exploring other options.
But if you do want to leave an inheritance to your child, you don’t have to cut them out of the will. Instead, you could just set up an incentive trust. For instance, the trust could be established to say that your adult child gets an annual payout from the trust that is equal to the amount of money they earned that year. When they retire, they get the remaining balance. This way, your child still has an incentive to work hard and maximize their earnings, but they also get an inheritance that can be life-changing.
As you look into your legal options for estate planning, carefully consider the tools you can use and how they may apply in your situation.