By Lane V. Erickson, Idaho Estate Planning Attorney
Estate planning is an important tool not only for the individual who is creating it but also for any of their family members or other loved ones that they may be leaving their property, money, or other assets to after they pass away. The person who creates the estate plan has the ability, if they choose, to use their estate planning as a way of helping their family and loved ones not only by giving them things, but also by providing incentives that may help them during their lives. This is usually accomplished through either a written last will and testament, or through a trust.
Our team of knowledgeable and experienced Boise estate planning lawyers have helped clients for over 70 years in creating their own customized estate plans. Many of our clients have used their estate planning as a tool to provide incentives to their children and other loved ones. Our team of Boise estate planning lawyers includes partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley. Each member of our team has developed the skills, experience and knowledge needed to help our clients. We take the time to answer our client's questions and to help our clients understand the estate planning options that are available to them, such as creating incentives for their children, so that they can make meaningful decisions about what they want to accomplish with their estate planning documents. We are confident that we can answer your questions and help you too.
When it comes to creating an estate plan that involves children, we find that many of our clients have several questions about what they can and should do to help their children. We've found over the years that most parents want good things for their children. Many of these parents have been thoughtful and very deliberate about how they can provide incentives to their children to help them become independent and self-sufficient. If this describes how you feel, below is a list of a few things you should understand that may help you determine whether using incentives as part of your Boise estate plan is a good idea.
Why Incentives are Good for Some Children?The number one question that most parents asked us is why incentives in their estate plan would be a good idea for their children. Our response is that parents understand and know their children's personalities, as well as their strengths and weaknesses better than anybody else. As a result, parents are usually the best people to decide how an incentive might benefit their children after the parents are gone. Consider a couple of examples.
First let's suppose that you are a parent with young children. It's important in your Boise estate planning to protect your children if you pass away while they are young. In this instance, most people would want the money, property, and assets in their estate to be used to help their child become educated and find a profession or livelihood that will allow the children to provide for themselves for the rest of their lives. As a result, college education is usually a high priority for parents with young children.
As another example, suppose you are a parent who has adult children. Some parents find that their adult children have continuing issues with addictions to alcohol or drugs. Because of this, these children have had a difficult time finding a suitable career, or in being stable enough to take care of themselves. Parents with children like this are often motivated to use their estate planning as a way of providing incentives to help their children overcome these problems.
As an additional example, some children may be struggling financially simply because they do not understand or know how to handle their money properly. Alternatively, some children have gambling problems or other financial issues that create concerns for their parents.
All of the examples above, are from real issues that I have had clients actually bring up to me as we've discussed their estate planning. By being thorough and finding out the circumstances of our client's families, including their children, we have the ability to then help them understand how using incentives in their estate planning can benefit their children. This that leads to the next question.
What are the Types of Incentives You can Create?As you can see from what was discussed above, there could be several reasons why a parent would want to include incentives for their children as a part of their Boise estate plan. These reasons are usually really focused on the specific personality, problems, and or needs that might arise with each individual child. While the reasons may vary, there really are a limited number of incentives that you can provide that would be helpful to your children. Some of the incentives that our clients have used before for their children include the following:
We've found that the number one reason that most parents want to provide an incentive to their children is to help their children gain an education. Normally this applies to parents with younger children, but it doesn't have to. Also, getting an education doesn't necessarily mean that your child will end up having a college degree. Education comes in many forms, any of which could be helpful for a child during their lives. We have found that most parents want to make sure that their children gain enough education that they are able to provide for themselves and be self-sufficient financially.
When it comes to estate planning and using education as an incentive for your children, you have the option of providing these incentives either in your last will and testament or in an independent trust that you create. For example, many of our clients will create a testamentary trust in their will for their young children. If the parents die when their children are young, the written will creates the trust. This testamentary trust is designed to provide for their children while they are young and to give incentives to their children when they become adults. Our clients will state that distributions from the trust will be given directly to the child at certain ages provided that their child can prove to the trustee that they have either enrolled in, or have successfully completed some higher education program, regardless of whether that results in a degree, or a certification or license of some sort.
In addition to helping children gain an education, many parents also use incentives in their estate planning to help children develop their career. Money or other assets could be left in a trust by a parent that would be used to help a child establish a new business or further develop a business that already exists. A parent has the ability to put into a trust specific criteria or parameters that have to be met by a child in order for monies from the trust to be distributed to the child.
Another common example of incentives that parents have used to help their children has to do with gaining financial knowledge. We have had parents who will allow a distribution from the trust of a certain sum of money, say $100,000, when the child can prove to the trustee that they themselves have saved that amount of money. In other words, the trust is then used to match the funds that have been saved by the child.
Another example of incentivizing financial knowledge for a child is helping them gain a financial education. Several of our clients have required their children to provide proof to a trustee that they have completed a financial program, such as the Financial Peace University course offered through the Dave Ramsey program. While this is just an example, it does help illustrate the fact that you can require your children to reach a certain amount of knowledge before distributions from your trust or estate plan will be given to them. By doing this, you may be eliminating any concerns you have about that child's ability to understand finances and how to handle money they receive or earn.
Whether you want to protect your children from addictions are problems they have, or whether you want to help your children develop into responsible adults, using incentives as part of your estate plan maybe a good idea. Over the years, we have helped many clients use these types of incentives in their estate planning to help them their children. We are confident that you we can help you use incentives in this way as well.
Because no two children are alike, and no two individual circumstances are alike, we always encourage our clients to speak with a qualified Boise estate planning attorney to help them understand the options that exist for them when it comes to using incentives as part of their estate plan. A qualified estate planning attorney can answer your questions and may help provide you with ideas that you have never considered before. The goal of a good estate planning attorney is simply to carry out your specific intentions. for this reason, we suggest that you have a consultation with a qualified so that you can understand your options and can make meaningful decisions that will help you, your family, and the loved ones you may leave behind.
Enlist a Boise Estate Planning and Probate Attorney to Help YouOur experienced Estate Planning team of attorneys can help you and your family with your Boise estate plan or with your probate needs. Whether you are seeking your own customized Estate Plan or are in need of a Probate for a loved one who has passed, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation with the Racine Olson team. You can also email us directly at racine@racinelaw.net. We will answer your questions and will help you solve your Boise Estate Planning and Probate problems.