Too Much of a Good Thing

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While our goals for what happens after we’re gone may differ, we share more in common than we often realize. As President John F. Kennedy once said, “Our most basic common link is that…we all cherish our children’s future. And we are all mortal.”

Many of us work tirelessly to provide for our families, striving to make our children’s lives better than our own. If we’re fortunate, we may accumulate significant resources to pass on to the next generation. However, too much financial support can sometimes do more harm than good, making children less productive and less fulfilled.

Trust distributions

The Challenges of Wealth

The 2003 documentary Born Rich, created by Johnson & Johnson heir Jamie Johnson, explores the lives of the ultra-wealthy and their heirs. Interviewees, including Ivanka Trump, Georgina Bloomberg, and others, discuss how generational wealth has shaped their lives. Some stories are sobering, including tales of drug abuse and aimlessness. Others reveal a lack of appreciation for hard work or a sense of entitlement, with one heir joking dismissively about donating their inheritance to the homeless.

But you don’t need billions to face these challenges. Many parents wonder how to support their children without unintentionally stifling their growth or diminishing their sense of accomplishment.

A Solution: The Family Incentive Trust

A Family Incentive Trust offers a thoughtful way to balance financial support with encouragement for productivity and personal growth. This type of trust can be tailored to align with your family’s values and goals while providing your children with financial security.

Here’s how a Family Incentive Trust can work:

1. Rewarding Achievements

  • Trust distributions can be tied to accomplishments, such as graduating from college, maintaining a certain GPA, or earning a professional degree.
  • This motivates children to pursue education and personal development.

2. Matching Income

  • The trust can match a child’s earned income, encouraging productivity and a strong work ethic.
  • For example, it could offer a higher match for lower-income careers like teaching or public service, promoting meaningful contributions to society. Conversely, it could match higher-income earnings, incentivizing entrepreneurial or professional success.

3. Flexible and Customized Support

  • The trust can fund basic needs while requiring children to work for their “wants.”
  • It can also include provisions for charitable endeavors, fostering a sense of social responsibility.

A Loving Way to Foster Growth

A Family Incentive Trust isn’t about withholding resources—it’s about providing thoughtful support that encourages children to lead productive, meaningful lives. By tying financial distributions to accomplishments and values, this type of trust can:

  • Foster a strong sense of self-worth.
  • Promote responsibility and hard work.
  • Ensure your children grow into productive, well-rounded members of society.

Plan for the Future with Expert Guidance

Creating a Family Incentive Trust requires careful planning and an understanding of your family’s unique dynamics. A qualified estate planning attorney can help design a trust that reflects your goals, values, and circumstances, ensuring your children are supported in a way that helps them thrive.

When it comes to your children’s future, too much of a good thing can have unintended consequences. A Family Incentive Trust strikes the right balance—helping you provide for your children while fostering independence, ambition, and a fulfilling life.

From the desk of Attorney Brandon McGee

Brandon McGee
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