May 01, 2020 | Financial Advisor

What Trust Truly Motivates

1 min

On May 1, 2020, Sarah Kahl published “What Trust Truly Motivates?” in Financial Advisor. The following is an excerpt:

Wealthy families know it can be hard to motivate their children to be productive members of society when trust funds are available to support those children. I hear Warren Buffett quoted often in my estate planning practice: The perfect amount to leave to kids, he says, is “enough money so that they would feel they could do anything, but not so much that they could do nothing.” Worried that access to unlimited funds is bad for their children’s independence, wealthy parents often turn to “incentive trusts” to hold their kids’ inheritances. These vehicles instruct a trustee not to give money to an adult beneficiary who is not engaging in a productive lifestyle such as working or caring for family members.

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