Article On Using Lessons from Labor Supply Theory to Design Incentive Trusts

John Michael Grant  (Marval, O’Farrell & Mairal), recently published an article entitled, Complications in Putting Unborn Spoiled Brats to Work: Using Lessons from Labor Supply Theory to Design Incentive Trusts, (June 12, 2015). Provided below is an abstract of the article:

Labor Supply Theory has never been applied to estate planning, despite its relevance to the design of incentive trusts. I first discuss common incentive trust structures and goals, and possible alternative provisions designed to encourage a beneficiary to engage in productive work. Next, I give a brief presentation of labor supply theory and indifference curve modeling. I then apply the models to alternative incentive trust structures and will offer arguments for the adoption of a minimum salary structure with wage enhancements. I conclude by offering reasons to doubt certain underlying assumptions and to hesitate before advising clients to adopt the recommended structure.