BusinessReport.com

So you’re getting close to retirement, you’ve worked hard and saved judiciously, and you genuinely want to leave a legacy for your descendants. But you can’t shake the feeling that the kids are just waiting for you to keel over so they can blow the inheritance on a two-week bender in Las Vegas.

And you may be right. But there are ways to be generous to your heirs without risking the nest egg to their basic instincts.

“The money you give to heirs is important, but so are your values,” says Keith Cox, a certified financial planner based in Baton Rouge and the founder and president of Premier Financial.

One way to do that is by setting up a rewards-based trust. Suppose you want your grandchildren to attend college. You might set up a trust that rewards them for reaching certain educational goals, like hitting a certain grade-point average or making the dean’s list. The idea is to affix a value to certain acts that will help your heirs succeed in life without having to depend on a lump sum of money. Some trusts include clauses that stipulate the heirs donate a certain amount of time or money to charity.

“It’s important to truly know the personal strengths and character flaws of anyone you plan on bequeathing assets to,” Cox says. If part of your estate is going to someone who’s not known for being able to handle money, you might want to set up a trust that dictates when that person can get certain amounts of money.

The downside of such trusts is that they can sometimes be too restrictive, says Paul Rabalais, a Louisiana estate planning attorney and the author of the self-published Estate Planning in Louisiana: A Layman’s Guide to Understanding Wills, Trusts, Probate, Power of Attorney, Medicaid, Living Wills & Taxes. What if the trust dictates that the heir enters the family business, but the business is no longer viable in 20 years? What if it requires the heir to graduate from college, but that person isn’t college material?

Rabalais says it might be a better idea in some cases to give written guidelines instead of rigid requirements, which makes carefully choosing your trustee even more important. Multiple trustees may be the way to go; most large banks have corporate trust departments that can manage the assets, while your individual trustee handles the distribution and makes sure your desires are followed as closely as possible.

One way to put your will in context is by writing what Cox calls a “family love letter” that describes how you’d like to be buried, where your important documents are, how you’d like your heirlooms distributed and so on. Rabalais helps many of his clients make digital films that can explain their wishes while also serving as a heartfelt memento for future generations. Thanks to a 2005 change in Louisiana law, films can be admissible in court when there’s a dispute over a will, although in no case can they substitute for the actual written document.

People tend to put off making a will until their late 50s or early 60s, or until a major life event such as a remarriage, but Rabalais says the sooner, the better. And you don’t need to be rich to need a will. He tells the story of a man with less than $50,000 in assets who had never made a will and was suffering from Alzheimer’s Disease. His daughter had to sue him and have him declared incompetent just so she could have access to his medical records and visit the doctor with him.

“Anybody who owns anything really needs to get this done,” Rabalais says.