There are a lot of ways to use the estate planning process to protect your wealth. One way is to be careful about who you leave your assets to, but sometimes you want to provide financial support to a loved one even when they don’t have the greatest track record of fiscal responsibility.
What can you do in these circumstances? One option is to use a spendthrift trust.
What you should know about a spendthrift trust
A spendthrift trust is a great way to protect your wealth from both creditors and your loved one’s squandering. Here, assets are placed in the trust and managed by the trustee, who then manages the assets and makes incremental disbursements to your named beneficiary. This differs from a discretionary trust in that the trustee must pay out portions of the trust’s assets as identified in your estate planning documents rather than releasing those assets at their discretion.
Are there other benefits to a spendthrift trust?
There are. Of course, protecting your assets from being squandered away or snatched up by creditors are the biggest benefits, but there are other advantages to one of these trusts. This includes allowing those assets to bypass the probate process and providing long-term stability for your beneficiary and longevity for your assets.
Are you ready to create the estate plan that’s right for you?
To protect your estate as much as possible, you need to know what legal vehicles you can utilize and how to exploit them to your advantage. An attorney who is well-versed in this area of the law may be able to help you do that.