When a trust grantor believes a beneficiary may need enhanced asset protection, they may set up a spendthrift trust. This type of trust is best suited for individuals who may be a financial danger to themselves if given unfettered control or may be subject to being taken advantage of or exploited.
If you are creating your estate plan and would like to set up a spendthrift trust to protect one or more of your adult loved ones, consult with an experienced estate planning attorney in Florida first. Your attorney can review your objectives, as well as the size of your estate, and help you devise a plan that fulfills your wishes.
The primary goals of the spendthrift trust are to:
- Restrict the beneficiary’s direct access to trust income and/or principal.
- Allow you to nominate someone you trust implicitly to have control over the assets in the trust to provide for and take care of your loved one based on the needs/standards you set out in the trust.
Not only does a spendthrift trust protect a beneficiary from their own wanton spending habits or other challenges, it also protects trust assets from the beneficiary’s involuntary creditors.
When is a Florida spendthrift trust most useful?
The spendthrift trust may be helpful/advisable when the beneficiary:
Is not good with money — Parents with children or other loved ones who have poor money management skills may want to establish a spendthrift trust. This provides the opportunity for your loved one to benefit from assets you leave for them, while ensuring they do not have direct control to frivolously spend money and drain the trust immediately.
Might be deceived or defrauded — If you believe your loved one is gullible or easily duped, a spendthrift trust can protect their assets. It may also be used for a loved one who lacks the mental competence to properly manage their money.
Might easily fall into debt — If you have a loved one with a history of making poor investments and accumulating debt, but you do not want to cut them off completely, an attorney can help you set up a spendthrift trust.
Has an addiction that could make them waste the money — An individual with an addictive personality can burn through an entire trust in a very short amount of time. Whether the addiction is gambling, alcohol, drugs, or even online gaming, a spendthrift trust can protect the assets in the trust from the beneficiary’s often irrational decision-making process.
You worked hard to build your legacy. Now it is time to ensure your heirs can enjoy it. A sound estate plan can set your mind at ease and ensure your family is protected after you are gone.
Contact an experienced team of Florida estate planning attorneys today
At the Law Offices of Hoyt & Bryan, LLC, we help clients with all aspects of the estate planning process from wills and trusts to estate administration and elder law. To discuss your estate planning matter with an experienced attorney, call (407) 977-8080 or contact us online. We have office locations in Oviedo and Altamonte.