All parents worry about their children and ultimately want a son or daughter to succeed. When possible, most parents also want to be able to pass on wealth to a child via an estate plan. In cases where a parent has concerns about a child's career or life choices and/or wants to encourage a child to make certain choices, it makes sense to explore establishing an incentive trust.
Like any trust, the creator of an incentive trust funds the trust and names a beneficiary along with a trustee to manage and distribute the trust's assets. While most trusts contain provisions that provide a trustee with direction on how to manage and distribute a trust’s assets, an incentive trust requires that a beneficiary fulfill certain conditions.