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Law Offices Of Dwight W. Clark L.L.C.
Law Offices Of Dwight W. Clark L.L.C.

Call Today to Schedule an Appointment

Local 410-505-8680 | Toll Free 888-523-6081

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Should you consider a spendthrift trust?

On Behalf of | Feb 14, 2024 | Estate Planning |

As a parent, you love all your children equally. But that doesn’t mean that you are blind to their faults and weaknesses. In fact, you’re uniquely positioned to grasp situations where they might be in over their heads.

When it comes to estate planning, these points are vital to consider. Below is some information you may want to keep in mind when planning the disposition of your estate.

Remove the rose-colored glasses

You may have one or more heirs who are genuinely good people, but they have flaws that would prevent them from being able to manage a substantial chunk of money once you pass. They may be fiscally naive, struggle with alcohol or drug addiction or have a penchant for gambling that could prove problematic.

Others may be married to spouses who run through money like it’s water. They could pressure (or even bully) your heir into giving them access to their inheritance. Still others may be vulnerable to asset seizures from debt collectors.

What are your options?

A spendthrift trust is one possible solution to your estate-planning dilemma. This provision restricts access to the trust’s principal

Here’s how it works. You choose a trustee to oversee the trust management. This person not only manages the trust assets but also disburses sums to your heir(s) according to your wishes. You can arrange for disbursements to be made annually, quarterly or even monthly if you choose.

Who should be the trustee?

That’s a question only you can answer, but it is generally better to choose someone who has no familial ties to your heir. Designating a sibling or other relative as trustee can upset the balance of the parties’ previously convivial relationships.

People often choose a professional financial planner or attorney to be the trustee of an heir’s spendthrift trust funds to preserve family unity after you have passed.