Behavior Modification 

• Peter McCarthy, JD

Beyond providing money for emergencies, a generation-skipping trust can be structured in ways that attempt to guide the behavior and life choices of future generations of family members. The trust does this by providing financial incentives to live in a certain way or to make life choices the trust’s creator thinks will be in their long-term best interests. Here are some provisions that might be placed in a trust:

Public Service Incentive. The trust may reward public service by supplementing the salary of a family member who chooses to work at a non-profit or in government, careers that often pay less than the private sector.

Achievement Bonus. The trust may make distributions to family members at certain milestones, such as graduating from college, earning a professional license, or buying a home.

Happy Marriage Incentive. To encourage family members to get and stay married, the trust might pay a bonus upon the date of a marriage and/or at specified anniversaries.

Grandchild Incentive. The trust can make a single payment or a series of payments to children when they have children of their own.
Family Reunion Fund. The trust can pay the cost of regular family get-togethers, which can be important when some family members live abroad and don’t often see the rest of the family face-to-face.