If you are considering setting up a trust for your grandchild, you have likely considered several different options. You naturally want a solution that is financially efficient for you and still helps your grandchild to benefit financially.
However, if you grandchild is still a child or a very young adult, you may have doubts in regard to their ability to manage large sums of money in a responsible way. This is why creating a spendthrift trust may be a wise option.
Why are spendthrift trusts often used for grandchildren?
Spendthrift trusts allow the trust maker to make a great number of provisions about how the money will be spent. These provisions could be especially relevant in a situation where the beneficiary is not yet at an age of maturity. The trust maker can, for example, delay disbursements from the trust until the beneficiary reaches a certain age to make sure that the money goes to the beneficiary -- not their parents.
Is the creation of a spendthrift trust more complex than others?
The process of creating a spendthrift trust is identical to that of any other trust fund. The only difference is the detailed addition of the provisions that you want to include in the trust.
What other benefits do spendthrift trusts offer?
One of the great advantages of spendthrift trusts is that their contents are protected from creditors. This means that any debt that the beneficiary gets into will not have any effect on the contents on the trust.
If you are considering creating a trust in the state of Arizona for your grandchild, it is wise to investigate the variety of provisions that you can put in place to protect their future.