Passing an inheritance to your children often raises the question of how the beneficiaries would use it after they receive it. Most often, you already know the answer—it probably would not last very long. You strongly suspect they would not value it like they should and would spend it as if money grew on trees. If so, you may want to include a spendthrift trust in your estate planning.
Two Main Benefits
The potential beneficiary—or one of them—is irresponsible with money and assets. Or, they may be likely to use it for gambling, alcohol, or drugs. At the same time, you want them to have some assets that could bless them once they learn their value. A spendthrift trust puts the assets in the hands of a trustee who will make the property available according to the terms of the trust’s Grantor.Another powerful benefit of a spendthrift trust is that the property under it is not under the beneficiary’s control. The Legal Information Institute says it means that a creditor cannot gain access to the assets in the trust.
