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Home » Estate Planning » Trusts » Spendthrift Trusts Can Provide A Solution

Spendthrift Trusts Can Provide A Solution

November 28, 2011 by John Potter

When you are making plans for the future distribution of your assets to your loved ones you should consider how well each of the people on your inheritance list can handle financial resources.

Your estate represents the final act of giving that you will be capable of and of course some  family members may be in need of financial assistance when you are no longer around. For this reason you may not want to give a lump sum inheritance to someone who is a poor money manager because of the potential for future financial disaster if your heir burns through the money too quickly.

You do have options when you are planning your estate if you have concerns about a spendthrift heir. With a spendthrift trust, you could protect the assets from your beneficiary’s creditors while making financial resources available throughout his or her life if this is what you would like to do.

The way that it works is that you place assets into the trust, name a beneficiary and appoint a trustee to manage the assets. Some people appoint a family member or family friend as trustee; many utilize the trust department of a local bank or trust company to manage the resources they put into the trust.

Distributions are made to the beneficiary in accordance with your wishes as stated in the trust agreement. However, the beneficiary does not have direct access to the principal so you don’t have to worry about the beneficiary’s making bad financial decisions or spending the money all at once.

These trusts are a viable solution under certain circumstances. If you are interested in creating a spendthrift trust for the benefit of a loved one, don’t hesitate to pick up the phone to arrange for a consultation with an experienced estate planning attorney.

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Filed Under: Trusts Tagged With: Estate Planning, Inheritance Planning, Legacy Planning

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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

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