Wealth Docx® New Enhancements to Include Incentive Trust Provisions for Revocable Living Trusts

Jun 29, 2018 6:00:00 AM


When it comes to transferring wealth to younger generations, not all beneficiaries are responsible enough or prepared to handle a large inheritance. This is where incentive trust provisions come in. They can be used to discourage bad behavior and motivate beneficiaries to make responsible life choices, so that they are ultimately better prepared to handle their inheritance.

An incentive provision is the establishment of specific requirements that beneficiaries must meet before receiving any distributions of the trust’s assets. For example, a beneficiary can be required to obtain a certain level of education, such as graduating from college, be of a certain age, maintain gainful employment, or assume a role in the family business. Trust incentives can also be used to reward positive behavior such as: abstaining from drug and/or alcohol abuse, or to encourage charitable endeavors, such as volunteering and community service.

Whatever the specific requirement may be, trust incentives are beneficial for clients looking to promote their personal values and help descendants find financial security, while also motivating them to still be productive, responsible members of society.    

Wealth Docx® and Incentive Trust Provisions

Due to popular demand, WealthCounsel has heard its members and will be adding an incentive trust provisions option within the Simplified and Full versions of the revocable living trust (RLT) module. To include incentive provisions, the option for distribution to “a named individual” must be selected on the Specific Distributions details screen. From there, users can select the “Monetary Gift - Trust” option and then select either a general needs trust or a special needs trust, which is converted to a general needs trust.

Users will have 11 different incentives to choose from and will be able to select multiple, various types of incentives. If a provision is too vague, users can edit language or create their own incentive provision by replacing the clause with a newly created one. These clauses can then be saved into a user’s clause library for future use. Other options users may decide to include are:

  • Allow the trustee to affirmatively monitor the beneficiary's progress.
  • Include the same incentive provisions for the beneficiary's descendants.

Add discretionary guidelines. Incentive provisions can have unintended consequences, such as penalizing a beneficiary who chooses to be a stay-at-home parent or becomes too ill to finish school. To minimize these possible scenarios, users can customize their own discretionary guidelines to give the trustee the discretion to accommodate changing circumstance and/or unintended effects that an incentive may have on an individual.  

Further customization. In addition to customizing incentive provision language, users can also customize the Trust Summary. Previously, users could only customize a minimal amount of information such as the trust name, copyright information, practice information, and the table of contents. This new enhancement will allow users to have full control over customizations in any area of the Trust Summary.

How WealthCounsel members can prepare for this software update

While the update should not impact customizations to existing documents, members should finalize any completed documents before accepting the enhancement. Finalization is an important step for any Wealth Docx-based document, because documents left “in-progress” will be susceptible to any future software updates--manual or automatic. Since updates tend to change language within a document, this can cause major discrepancies between the document in a user’s library and the document within the client’s possession.

The software launch is scheduled for June 27, 2018Wealth Docx Online users will have a 15 day grace period (6/27 - 7/11) to finalize any documents before the automatic update takes place on July 12thDesktop users of Wealth Docx can manually update at any time of their choosing. Wealth Docx Online users can accept the enhancement prior to the automatic update by logging in to the member websiteFor more detailed information on how to finalize documents before the update, members can click here.

 If you’re ready to get the help you need and take your practice to the next level, schedule a demo with one of our staffdiscuss pricing and learn how WealthCounsel can meet your practice’s particular needs.



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