[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.amorusolaw.com\/blog\/benefits-of-a-spendthrift-trust\/#BlogPosting","mainEntityOfPage":"https:\/\/www.amorusolaw.com\/blog\/benefits-of-a-spendthrift-trust\/","headline":"The Objectives and Benefits of a Spendthrift Trust","name":"The Objectives and Benefits of a Spendthrift Trust","description":"A\u00a0spendthrift\u00a0trust is typically used to prevent a beneficiary from receiving his or her inheritance all at once. There are several reasons why a grantor (the person who creates the trust) might want to consider such an approach. The most obvious reason is that the grantor believes the beneficiary will quickly squander the inheritance. That is, […]","datePublished":"2023-01-10","dateModified":"2024-11-21","author":{"@type":"Person","@id":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/#Person","name":"Amoruso & Amoruso, LLP","url":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/","identifier":5,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Amoruso & Amoruso, LLP","logo":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","width":0,"height":0}},"image":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/benefits-of-a-spendthrift-trust.png","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/benefits-of-a-spendthrift-trust.png","height":1070,"width":2048},"url":"https:\/\/www.amorusolaw.com\/blog\/benefits-of-a-spendthrift-trust\/","about":["Estate Planning"],"wordCount":509,"articleBody":"A\u00a0spendthrift\u00a0trust is typically used to prevent a beneficiary from receiving his or her inheritance all at once. There are several reasons why a grantor (the person who creates the trust) might want to consider such an approach. The most obvious reason is that the grantor believes the beneficiary will quickly squander the inheritance. That is, the beneficiary is a spendthrift.Other reasons to consider a spendthrift trust include:The beneficiary (or the beneficiary\u2019s spouse) has many debts and, consequently, the inheritance could be lost to creditorsThe beneficiary\u2019s marriage is troubled and seems likely to end in divorceThe beneficiary\u2019s friends are spendthrifts (or worse) and have undue influence over the beneficiary\u2019s behaviorThe beneficiary is simply \u201cnot good with money\u201dThe beneficiary suffers from alcohol or drug addictionHow does a spendthrift trust protect the beneficiary\u2019s inheritance in situations like these? First, the beneficiary cannot access the assets in the trust, or promise them to someone else. Thus, creditors and other threats cannot reach the trust\u2019s assets either. In addition, since the beneficiary\u2019s inheritance can be distributed in specified amounts over time, the entire inheritance cannot be lost all at once. Of course, the portion that is distributed would be vulnerable unless other protective measures are taken.The Role of the TrusteeIt is crucial to choose one\u2019s trustee carefully because the terms of the trust give the trustee control over trust assets and their distribution to the beneficiary. Similarly, it is extremely important to outline the trustee\u2019s authority in detail. Here are some examples of factors to consider when setting the terms of the spendthrift trust:Should the trustee be instructed to make fixed payments according to a specified schedule, or does the trustee have some discretion to choose the amount and timing of distributions?Should the trustee make distributions in cash or provide the beneficiary with goods and services instead?Can the trustee withhold distributions if the beneficiary behaves inappropriately? If so, what types of behavior would trigger the withholding of assets?Given the importance of the trustee\u2019s role in administering the trust and managing the beneficiary\u2019s inheritance, the choice of trustee should not be taken lightly. The decision to serve as trustee should not be taken lightly either. In certain situations, the trustee could very well be performing the role of mentor, or disciplinarian, or even parent. In addition, the trustee can be held legally and financially responsible for failing to follow the mandates of the trust.Other factors to consider when creating a spendthrift trust include how and when the trust will end, what will happen if the beneficiary \u201cgrows up\u201d and develops the maturity to manage the inheritance, and what should be done with trust assets if the beneficiary passes away.Contact an Estate Planning AttorneyIf you want to leave a loved one an inheritance but are concerned about his or her ability to manage it,\u00a0we can help you determine whether a spendthrift trust is a good solution."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog","item":"https:\/\/www.amorusolaw.com\/blog\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"The Objectives and Benefits of a Spendthrift Trust","item":"https:\/\/www.amorusolaw.com\/blog\/benefits-of-a-spendthrift-trust\/#breadcrumbitem"}]}]