Are you worried about leaving a major inheritance to your children? This is a sentiment often expressed by those who may be leaving a substantial inheritance to the next generation. Their concern is that the inheritance will be so significant that it will take away their children’s desire to continue working, eliminating their motivation because they can they know that they can just live off of the money they received.
Of course, you could opt not to leave any inheritance to your children. Some people decide to give most of their wealth to charity. But there is another option if you would like to provide your children with an inheritance in a way that still incentivizes them to work.
Using a trust
What you need to do is put the inheritance money into a trust. You can then stipulate how it should be paid out to your adult children after your passing.
For example, you may decide that you want your child to get an annual payment from the trust, rather than getting the full balance at once. The total payment that they receive should be the same as the amount of money they earn that year.
This way, if that person works hard, gets promotions, earns commissions and increases their salary, they get more money out of the trust. But if they stop working entirely, they do not get anything. They still have an incentive to continue working and they have motivation to work hard, despite the inheritance.
This is just one way that you can use a trust as part of your estate plan. Carefully look into all of the options at your disposal.