A spendthrift trust is a type of trust that can be created by a person who wishes to leave money to someone who the gift giver is not confident will be responsible with the funds. The purpose of this type of trust is to make certain that the trust beneficiary does not squander an inheritance or spend money too quickly in an irresponsible way.
There are strict rules for the creation of a spendthrift trust under Ohio law. If you are considering creating this kind of trust, you need to make certain that you follow the proper protocols so that the trust can provide the expected protections.
Zimmer Law Firm can help. Give us a call today to find out more about the definition of spendthrift trusts and to get help determining if you should create this type of trust. If a spendthrift trust is the right option for you, our legal team will help you to follow Ohio rules for trust creation so you can protect your wealth and provide a gift that will make a difference in the life of your loved one.
What is a Spendthrift Trust?
A spendthrift trust is a type of trust that you create to protect an heir who you plan to provide a gift to. If the person who you are giving money to has a history of spending unwisely, you don’t want to leave him or her a large sum of money with no strings attached. The money could be spent quickly, or could be lost to creditors if the person who inherits gets into debt.
With a spendthrift trust, you don’t have to worry about this happening. Instead of just giving a gift to a person who is irresponsible with money, you will create a trust and name that person as the beneficiary of the trust. You will also name a trustee who is placed in charge of managing the money in the trust and distributing it appropriately to the beneficiary according to your instructions.
The trustee will have a fiduciary duty to manage the trust assets in the best interests of the beneficiary. The trustee should be a responsible person who you are confident can do a good job managing trust assets. The trustee will keep the wealth in the trust safe, while the beneficiary will benefit from the gift without being able to spend the money all at once or lose assets due to financial irresponsibility.
Why Should You Get Legal Help When Creating a Spendthrift Trust?
You should talk with an experienced attorney to make sure a spendthrift trust is the right kind of trust for you. There are different types of trusts that can be created under Ohio law. For example, while a spendthrift trust protects assets so they aren’t lost due to irresponsible heirs, this type of trust may not be the best option if your goal is to keep your wealth safe in case you experience certain losses during your own life, such as the need to liquidate assets to pay for nursing home care.
An experienced attorney can discuss all of the different kinds of trusts you can create and can provide guidance on the best asset protection approaches. We can also help you to make certain that you follow the rules for creating a trust. For example, Ohio Revised Code section 5805 sets forth the rules for spendthrift trust provisions.
If you do not follow all legal formalities for trust creation, then you and your heirs or beneficiaries may not end up getting the protections and benefits you expected. By the time it is discovered that the trust was not created properly, it may be too late to do anything to fix the issue and financial loss could result. Zimmer Law Firm will help to make certain that this does not happen.
Getting Help from An Ohio Trusts Lawyer
Zimmer Law Firm can provide assistance in assessing your situation and determining any special needs that your heirs have. By considering the personal situation of your heirs or beneficiaries, you can decide if a spendthrift trust or any other type of trust is right for you. Once you have decided on trust creation, our legal team will assist you in following Ohio laws to make certain that your trust is valid and provides expected protections.
To learn more about spendthrift trusts and how this type of trust can fit into a comprehensive estate plan, download our estate planning checklist. You can also give us a call at 513.721.1513 to get personalized advice and guidance in creating an estate plan that protects the people you love. Call now to get started.