June 25, 2024

Bucks: Keeping Affluent Kids From Turning Into Brats

In this weekend’s Wealth Matters column, Paul Sullivan looks at the reasons wealthy families are not giving a lot of large gifts to children and grandchildren right now, even though they may miss out on the opportunity to take advantage of generous tax rules that will only last until the end of 2012.

Scratch below the surface, as he did, and you quickly find that people are worried sick about family members using the money to live out their days on a beach somewhere. So the people with the money are trying to construct trusts with various restrictions aimed at making sure that the relatives continue to be productive members of society.

So let’s say you were the trust-master. How would you restrict a trust to make sure your heirs continue to work (or do good works)? What incentives would you put in place?

Article source: http://feeds.nytimes.com/click.phdo?i=f1dc2c13e577066420c4c93c2476333c

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