When you are creating a trust, you will likely be concerned about how your heirs will benefit from it in the future. If your heirs are particularly young, or you worry about how they will spend your hard-earned cash, you might start to wonder about ways that you can control how your trust is used, even after your death.
How is a spendthrift trust different?
The good news is that you can have control over factors such as these. The way that a spendthrift trust allows this to happen is that it involves another person who can control these assets on your behalf. This means that they can enforce the decisions that you made, but also that they are forbidden from acting beyond the provisions that you set. Therefore, if you grant an heir a certain amount of money distributed over yearly payments, he or she would not be able use the money before it was paid out to them. In this way, you have a high degree of control over the trust, even after your death.
How is a spendthrift trust formed?
In order to create a spendthrift trust, you follow the same process as you would when you create an ordinary trust fund. You only need to add a spendthrift provision within the terms so that you can specify your wishes. If you are interested in learning more about how a spendthrift trust can work for you and the additional benefits it can offer, you should conduct research into the legalities of different types of trusts.
Source: The Balance, “Spendthrift trust can protect your heirs,” accessed Nov. 03, 2017