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The Case for Principle Trusts And Against Incentive Trusts

The intention behind incentive trusts is excellent; the rigidity of these trusts is not. It's time to ditch the inflexible incentive trusts and instead learn how to fashion a principle trust. Rather than strict rules for distributions, a principle trust contains a flexible distribution standard (such as general welfare, best interests, sole discretion and the like) and gives the trustee a list of
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The intention behind incentive trusts is excellent; the rigidity of these trusts is not. It's time to ditch the inflexible incentive trusts and instead learn how to fashion a “principle trust.” Rather than strict rules for distributions, a principle trust contains a flexible distribution standard (such as general welfare, best interests, sole discretion and the like) and gives the trustee a list of behaviors to strive to encourage or discourage when making (or withholding) distributions under

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