When you are concerned about preserving, protecting and passing wealth onto heirs, it’s natural to be concerned about the beneficiary’s ability to properly handle such an inheritance. This might lead you to turn to an estate planning lawyer to set up a spendthrift trust.
This unique tool allows to keep a family’s money safe from heirs themselves in addition to outside creditors. The majority of assets inside a spendthrift trust are retained for an extended period of time, making only certain distributions to beneficiaries rather than transferring all of the assets to them outright and at once.
A spendthrift trust is also beneficial because it avoids the probate process. This means that you can place assets inside and transfer assets to those beneficiaries without the need for court involvement or oversight.
A spendthrift trust is one type of irrevocable living trust that is managed on an ongoing basis by a party known as a trustee. This continues on after the passing away of the person who created the trust. The purpose behind spendthrift trusts is to prevent certain beneficiaries from getting their inheritance all at once and perhaps squandering them.
There are numerous reasons why you might consider the creation of a spendthrift trust, allowing the inheritance to then be given out to them in portions over an extended period of time. The beneficiary has no direct right to the money and is not able to spend it prior to receiving any of these distributions, meaning that you can help spread this out and decrease the chances of problems in the future. For more information about using spendthrift trusts and other estate planning strategies, consult with a lawyer to guide you through this process in Pasadena, CA.