Spendthrift Trusts ... Financial Controls For Out-Of-Synch Beneficiaries

A spendthrift trust manages inheritance and asset transfers when an estate beneficiary is temporarily incompetent, missing or irresponsible due to accident, addiction or other factors.

Scope Of Spendthrift Trusts. Estate planning is difficult enough. Throw in our current 40,000 page Income Tax guidelines…add Federal and State estate tax laws…mix in an inadequately structured or out-of-date will…mix with Probate regulations and top it off by adding the X-Factor of a child who may have been impacted by the drug culture during teen years. With this combination of legal, emotional and family issues you have a potentially explosive estate transfer problem. Spendthrift trusts focus directly on this modern “sticky situation”, creating the legal and administrative means to manage a disciplined transfer of assets and value to an otherwise unstable heir

Living Trust Overview - Pricing .

Key Role Of Your Appointed Trustee In ASpendthrift Trust. Assume that you have a will, and that it’s up-to-date. Or, perhaps you have a living trust which has been funded with your lifetime assets such as real property, bank accounts, 401.K and IRA accounts, life insurance policies, stock and bond portfolios, safekeeping receipts for gemstones or other in-a-bank-vault assets.

* Controlling Spending By An Irrational Heir. A legal heir, made incompetent by addiction or lifestyle, may be years shy of maturity. Result? An influx of “cash” would be a large temptation…”burning a hole in my pocket” that on impulse could be wasted. Your spendthrift trust puts controls on this situation…not denying an heir their legal inheritance, rather “drip feeding” funds and allowances until they can demonstrate responsibility and maturity.

* Trustee As Administrator. Upon your death, your spendthrift trust trustee-administrator assumes for legal control over that portion of your estate to be transferred to your heirs, identified as the legal beneficiary. How much money will she or he receive…enough for education…enough money for a trip or an apartment…or money for modest day-to-day expenses? All of these resource questions will be adjudged by the spendthrift trust trustee, at her or his sole discretion. Taxes, reporting and all related legal requirements are the duties spectrum of the fiduciary.

Heirs Get Creditor Protection . Spendthrift trusts are considered stand-alone legal entities in the eyes of the court. Even though an estate’s assets reside within the spendthrift trust…and even if the records show that the ultimate ownership will be in the name of the heir, the trust creates a legal “barrier” to stop any attempt at asset seizure by a disgruntled creditor. Creditors cannot attach the assets of the spendthrift trust, rather can obtain satisfaction in the courts only for money or assets deemed to have been “received” by the heir. Message? No payments, no liens nor attachments against the spendthrift trust assets is allowed, even while the statute of limitations clock “runs out”.


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