Conditional Trusts: What to know
You’ve worked hard all your life to gather your wealth, and understandably you want to make sure that anyone who receives it is going to be responsible enough to maintain the wealth. This is why so many seek to add a conditional trust to their inheritance before they pass. So, what exactly are conditional trusts? These are a set of rules that the recipient must follow in order to be eligible for your inheritance. However, there are certain things you need to know about these types of conditions.
Some Conditional Trusts Cannot Be Enforced
Perhaps the most common misconception regarding these types of trusts is that they have to be enforced for the recipient to qualify for the money. However, there are certain conditions that many courts won’t enforce. For example, if you state that your wife, who is about to inherit your estate, must smoke a pack of cigarettes each week, then the courts might rule that forcing someone to harm themselves is not enforceable by law. (Read about estate planning techniques here.)
Now, that’s an extreme example, but you can see how easily a court can dismiss your wishes if they are not well-thought-out.
You Must Have a Back-up Plan Set
Not everything is going to go according to your plan, so you need to make sure that you have a back-up plan ready with your probate attorney in Las Vegas to ensure that your funds are properly managed if conditions aren’t met. For example, if your children don’t hold up their end of the bargain, such as finishing school, you can then have it written that the funds be distributed to charities or to another living family member.
