Protect Your Assets and Your Beneficiaries with a Spendthrift Trust
A spendthrift trust is a type of property control trust a grantor can establish to help protect trust property from a beneficiary's creditors. Oftentimes, a grantor may wish to leave money or other property to a child or grandchild, but for one reason or another, the grantor has reason to doubt the beneficiary's ability to handle the money responsibly.
Some of the reasons a grantor might choose a spendthrift trust include:
- The intended beneficiary has significant debt
- The intended beneficiary has an addiction or other mental deficiency
- The intended beneficiary has demonstrated an inability to handle money
- The intended beneficiary lacks sufficient education or financial acumen to avoid being defrauded by unscrupulous people
The spendthrift trust allows the grantor to appoint a trustee to provide for the beneficiary without risk that the corpus, or trust principal, will be wasted. It is a long-term asset protection device and must contain language that prohibits the beneficiary from anticipating, alienating, or assigning his or her interest in the trust property to any other person or entity.
The trustee provides benefits to the beneficiary in the form of a regular payment from the trust or in the form of goods or services paid for by the trust. How and when benefits are paid to the beneficiary are determined according to the terms of the trust.
For more information about a spendthrift trust or any other estate planning need, call an experienced estate planning lawyer at the Peterson Law Group. Our experienced Conroe, Texas attorneys help clients develop comprehensive estate plans, including drafting will and various trusts to fit their estate planning needs. Call us at 936-337-4681 or 979-703-7014 or contact us online to arrange an appointment.