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Jason A. Stuart

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Adult Education

     Americans cherish their personal independence. Each of us has the freedom and responsibility to make our own personal, health care and financial decisions upon reaching adulthood (i.e., age 18 in most states). If you have loved ones who are young adults, or soon will be, then you should share this article with them. We will review some of the fundamental threats to personal independence encountered by young adult Americans.

Incapacity

     The print and electronic media remind us that life can take some rather unexpected and unpleasant turns. From automobile accidents to tornadoes, people often are seriously injured in unexpected events. Aside from injuries, however, many people are incapacitated due to various illnesses, even though reports of their suffering rarely make the evening news. The threat of incapacity looms over everyone, and disaster does not play favorites. Unfortunately for some, incapacity is both unexpected and permanent.
     Whatever the cause, incapacitated Americans may lose more than the ability to care for themselves. In the absence of proper legal planning, they also lose the ability to select their own backup decision-makers for personal, health care and financial matters. By default, a court makes that selection through a legal process that may employ at least three lawyers, cost thousands of dollars and expose private personal and financial information to the public record. Thereafter, the backup decision-maker selected by the court will remain under its supervision, further adding to the ongoing expense and red tape. Truly in these cases, an ounce of legal prevention is worth a pound of legal cure.

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Carrots & Sticks

     Whenever someone lacking financial maturity receives an outright inheritance, it is typically good news for sports car (usually red in color) salespeople, travel agents and high-end electronics dealers. [Some have termed this Affluenza.] Is that how you want your hard-earned wealth consumed? And what about the potential long-term damage to your heirs?
     The Incentive Trust is one increasingly popular antidote to this dilemma (short of spending your kid’s inheritance, as the popular bumper sticker proclaims).

Incentive Trust Antidote

     As the name implies, an Incentive Trust is one in which the Trustmaker sets standards of conduct or achievement that must be met before distributions are made to or for the benefit of a beneficiary of the Trust. These standards may include such incentives as completing a certain educational level, becoming self-supporting through gainful employment, volunteering for charitable causes supported by the Trustmaker and even avoiding drug/alcohol abuse.
     However, Incentive Trusts may not include provisions that are considered contrary to public policy. Such provisions include those that may disrupt family relationships by encouraging separation or divorce, foster neglect of parental responsibilities, prevent marriage or discourage the performance of public duties. Otherwise, the scope of permissible incentives is limited primarily by your creativity as the Trustmaker.

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