A spendthrift trust is a specific type of trust that you can create if you want to leave an inheritance to someone but you are not 100 percent confident that the person who you are leaving the money to is going to be able to be responsible with the funds that you provide to him. A spendthrift trust can provide powerful protection for assets that you leave to a friend or a family member, and can ensure that the money you have worked so hard to acquire is not lost because of an irresponsible heir.
A spendthrift trust is just one of many different kinds of trusts that you could create which allow you to take more control over an inheritance that you provide to someone. You should understand the rules for spendthrift trusts and should explore different options for trust creation. Zimmer Law Firm can help.
Our Cincinnati trusts lawyers know Ohio trust laws inside and out and can assist you in determining if you need a trust, in deciding what kinds of trusts you need, and in following the formalities required to create a legally valid trust. Give us a call to find out more.
Four Signs You Need a Spendthrift Trust
A spendthrift trust allows you to leave money to a person who you care about but who you don’t think can actually handle the responsibility of managing the money or property as a result of irresponsible spending.
Four signs that you should create a spendthrift trust as a part of your estate plan include:
- You want to leave money to someone who you know has a spending problem: Handing a big inheritance to a person with a spending problem is a bad idea because the money could be quickly wasted. A spendthrift trust provides access to funds over time, so irresponsible spending is limited.
- You want to leave money to someone but are afraid that person’s creditors will come after the funds: When someone inherits who is in debt, or who falls into debt, creditors could take the inherited money to satisfy the debt. You can prevent this with a spendthrift trust.
- You want to leave money to a person who you are worried could fall victim to fraud: Some people are more likely to fall for scams than others. If you’re worried that the person who you’ll leave money to is likely to waste the funds on a scam, you can prevent this with a spendthrift trust.
- You want to leave money to someone who has an addiction that could impact his or her spending: Addiction of any type could cause out-of-control spending. You can limit losses by restricting access to an inheritance so the money cannot be quickly spent to satisfy an addiction.
Zimmer Law Firm can help you to determine if you should create a spendthrift trust. When you work with an experienced attorney who provides trust creation assistance, you can discuss your goals and family situation with a legal professional who will help you to identify the options that allow you to best care for the people who matter to you.
How Does a Spendthrift Trust Work?
When you create a spendthrift trust, you use your trust document to name a beneficiary who you wish to provide money or assets to, but who you are not confident is responsible enough to manage the funds. You name a trustee who you can count on to manage the money responsibly, and you designate rules for when and how money is to be distributed by the trustee to the beneficiary.
With a spendthrift trust, you do not give the beneficiary access to the principal. Because the beneficiary cannot access the principal, he cannot squander the money all at once and creditors cannot come after the assets that are held within the trust.
Getting Help from A Cincinnati Trusts Lawyer
Zimmer Law Firm will work with you to decide if trust creation is a good option as a part of your estate plan. We can discuss your goals with you, help you to determine if your heirs or beneficiaries have any special circumstances that suggest they could benefit from trust creation and can assist you with the formal process of making an estate plan that allows you to best provide for your loved ones.
To learn more about the estate planning process and how we can help you to provide for the people you love, join us for a free seminar. You can also give us a call at 513.721.1513 to get personalized advice from a Cincinnati trusts lawyer.