One of the biggest reasons to engage in estate planning is to provide for your loved ones. After all, who is in a better position to determine who would benefit most from your money than you? But estate planning isn’t about handing over a check to your spouse or your children. Instead, the process allows you to retain control over your assets so that they can be utilized on your terms. This control is powerful in a number of ways, but it is most readily apparent when leaving assets to an individual who may be at risk of quickly depleting those assets.
By utilizing a spendthrift trust, you can limit your estate’s exposure to an individual who is susceptible to over-spending and poor financial management. Through a spendthrift trust, a specified amount is paid out to a beneficiary at certain intervals. This ensures that a beneficiary receives consistent payments that provide financial stability while at the same time protecting the integrity of the trust’s assets for years to come.
There’s another major benefit of a spendthrift trust, too, that being that the assets in a spendthrift trust are protected from creditors. If a beneficiary owes a significant amount to creditors, then those creditors can only access money once it is dispersed from the trust. Again, this protection helps ensure that the assets placed into the trust will last for a significant period of time.
Although a spendthrift trust can prove beneficial for many estates, they’re not right in every circumstance. Yet, given the variety of trust types available to estate planners, there is usually one or more that can further an estate’s best interest. Those who want to learn more about those options can sit down with an estate planning attorney of their choosing to create a strategy that fits their needs.