As far as estate planning goes, there are several types of trusts available to meet the needs of the owner. Revocable, irrevocable, pet, and spendthrift trusts are the most well-known. If you want to leave money to a loved one but are concerned that the funds could do them more harm than good, a spendthrift trust might be right for your situation. Read on and learn more.
How Does the Spendthrift Trust Work?
As with all trusts, they only come into power upon the grantor's death. Then, the appointed trustee takes over to oversee the distribution of the funds to beneficiaries. In that way, a trust works much like a will does. However, a spendthrift trust allows the trustee to completely control the inheritance regarding a named beneficiary. Total control means the funds can only be distributed under certain conditions, at certain times, and in certain amounts.
The Scope of the Trust
Trusts, in general, are amazingly flexible in the way the grantor can leave specific instructions to be followed upon their death. Below are some examples of the ways a spendthrift trust can be used to control the inheritance of a beneficiary:
Speak to an estate lawyer about a spendthrift trust if you fear a loved one is unable to handle the money you leave behind. For more information, contact a law office near you.
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