Monthly Update for Administration of Trusts and Asset Management.

Kelli Bass |

It is our hope that our Monthly Update will be helpful for you to better understand the administration of trusts and asset management from a Trustee and Investment Advisor’s viewpoint.


As a parent, you want the best for your children.  You want them to become responsible, hardworking, well-educated adults.  At the same time, you may worry that the assets you intend to pass on to your children may somehow spoil them and act as a disincentive to their reaching their full potential.  

The good news is that parents who want to distribute wealth to their children in a responsible, yet structured way can do so while instilling positive values by establishing a family Incentive Trust.


Sometimes children, although of adult age, may not be mature enough to realize that assets held in Trust for their benefit were intended by the parents to supplement the child’s income, and not fully support the child.  Regrettably, it is not uncommon for adult children to attempt to live solely on distributions from the Trust, which results in the Trust funds being completely exhausted in a short period of time, leaving the child with no future distributions and the unpleasant reality of having to fully support himself or herself, solely on his or her own earned income.


An Incentive Trust is a Trust that contains unique terms regarding how often and under what specific circumstances distributions should occur, and how much the distributions should be. The Trust terms can include requiring your children to achieve various goals -- or refrain from certain activities -- before they can receive distributions.  


An Incentive Trust can reinforce your values and allow you to exercise a degree of control you wouldn’t have otherwise had if your assets are distributed to your children outright.  

For an Incentive Trust to be effective, you should set reasonably-attainable goals.  


You can include terms in your Trust to fit your specific family’s needs and personal objectives.  Examples include rewarding your children with distributions upon such child attaining a certain grade point average, earning an undergraduate degree, a post-graduate degree, etc.  It is not uncommon for parents to include terms that in some manner or another adjust the amount of distributions to your children based upon the child’s income earned from gainful employment.


While an Incentive Trust always contains positive incentives, and encourages the children to be good stewards of their inheritance, including terms that would discourage self-destructive behavior, such as the use of illegal drugs, excessive alcohol consumption and gambling habits can also help the children to develop into a responsible adult.  


An Incentive Trust will help encourage children to be self-supporting, and discourage children from developing a thought process of wanting to become a “Trust Fund Baby”, relying solely on distributions from the Trust as your child’s only or primary source of income.

WealthTrust Oklahoma is the Oklahoma trust representative office of National Advisors Trust Company.  We are independent and hold a federal charter.  In addition to trust administration services, we offer investment management services through our firm, WTO Advisors.

Alyssa Kaiser, CTFA, has over 30 years of experience in the trust, investment and banking industries and is President of WealthTrust Oklahoma.  Alyssa may be contacted at (405) 241-1600 or by email at