2023 Incentive trusts: The promise and limits of "Do what I want and I'll reward you"

Recording available after original program date, 9/8/2023

Incentive trusts are a mechanism by which the settlor tries to “incentivize” or seek to control the behavior of beneficiaries. Settlors may want to encourage children or grandchildren to achieve certain educational milestones, maintain a job, get married or have children, or remain free of substance abuse or other risky behaviors. But there are serious limits – limits of what the law will allow a settlor to demand of a beneficiary or a trustee to enforce. There are also practical limits, including how to objectively judge a beneficiary’s behavior when making distributions. Incentive trusts are decidedly a mixed bag. This program will provide you with a real-world guide to drafting incentive trusts, counseling clients about their effectiveness and limits, and understanding what the law will (or won’t) allow.

•    Uses and limitations – practical and legal – of incentive trusts.
•    Types of incentive trusts – and rates of success or failure in achieving settlor goals.
•    Structuring incentives so they can be objectively measured and administered by trustees.
•    Drafting distribution provisions.
•    Counseling clients about downsides of incentive trusts and alternatives.

Note: This material qualifies for self-study credit only. Pursuant to Regulation 15.04.5, a lawyer may receive up to six hours of self-study credit in a reporting year. Self-study programs do not qualify for ethics, elimination of bias or Kansas credit.