Incentive trusts are designed with the purpose of influencing behavior of the beneficiaries. The type and scope of these provisions is limited only by the imagination of the drafter, and a few more practical limits such as the assets required for implementation (including life insurance), the risk of conflict if assets are distributed unequally, adverse effect on other goals such as asset protection, possible roadblocks based on public policy concerns, and the cost in terms of loss of privacy as well as money necessary for the trustee to obtain adequate information to enforce certain provisions.
Incentive trusts can help with financial mentorship, passing down money skills to your children and encouraging them to pass those skills on to their children. They can match retirement savings; assist with purchasing car and home, and with starting a business; offer financial experience through investment committee participation, or even as co-trustee; and can evaluate stewardship of outright distributions given free of trust.
Incentive trusts can assist with career preparation, rewarding specific academic achievements, discouraging too much time in academia, providing alternate vocational training if appropriate. They can also maintain careers with continuing education, matching of earned income, venture capital.
Incentive trusts can help maintain families by supporting school or homeschool involvement; by rewarding a stay-at-home spouse; by providing vacation and recreational assistance; by encouraging visits with extended family; by providing incentives to avoid premarital co-habitation; by paying for wedding and honeymoon expense; by paying wedding anniversary bonuses; and by terminating survivor benefits when a marriage ends.
Incentive trusts can foster religious faith with incentives for religious training, ceremonies, and missions, and they can punish substance abuse, spendthrift behavior, or failing to support oneself, in a manner that rehabilitates and keeps the child safe and off the streets.
Charitable enterprise can be encouraged with personal involvement in charitable donations; with matching of charitable contributions; through service on a committee of beneficiaries to designate recipients; or with participation in a separate charitable trust or foundation.
Other provisions might care for pets or disabled family members; encourage good driving habits; provide assistance to guardians of kids; or even encourage estate planning.