Spendthrift Trusts
While there are many financially-responsible people in the world, not everyone has an easy time managing their money. For some, maintaining a budget and putting income into their savings account is not a priority. Perhaps some people simply enjoy lavish meals, shopping sprees, and vacations. For others, the situation may be a bit more precarious if they have an addiction to gambling or spending. Regardless of the spendthrift’s habits, such a person may be a part of your family, and you may want them to be a beneficiary of your assets. If this is the case, you might be hesitant about how much you leave them and at what pace. With an estate plan, you can establish a Spendthrift Trust with conditions to help a spendthrift relative in a way that does not risk them spending the money all at once or having the money get taken by creditors.
Understanding Spendthrift Trusts in Michigan
A Spendthrift Trust is one where the beneficiary has limited access to the assets. The grantor of the Trust, or the person who created it, can limit how much, how often, and under what circumstances a financially-risky beneficiary receives money from the Trust. Rather than a lump sum, the assets can be distributed incrementally according to the grantor’s desires. In addition, a Spendthrift Trust offers asset protection from any creditors to whom the beneficiary owes money. So long as the assets remain in the Trust, they cannot be used to satisfy creditors.
Who Are Good Beneficiaries of Spendthrift Trusts?
https://www.ccpc.ie/consumers/money/budgeting/managing-your-money/The beneficiary of a Spendthrift Trust is someone whom you want to help financially but who cannot responsibly manage finances, so you need to protect their inheritance for them. It is best suited for someone who cannot manage money well; cannot be trusted with a large sum of money; spends more money than they have; has a disability as an adult that interferes with their ability to manage finances on their own; has a mental illness that interferes with their ability to manage finances on their own and/or induces bad judgment, especially in terms of money; or has an addiction to gambling, drugs, and/or alcohol.
Who Are Good Beneficiaries of Spendthrift Trusts?
Choosing the Trustee of a Spendthrift Trust
Choosing the Trustee of a Spendthrift Trust
Pros of a Spendthrift Trust
Cons of a Spendthrift Trust
Cons of a Spendthrift Trust
Contact a Spendthrift Trust Attorney in Michigan
It is critical to make sure you create a Spendthrift Trust that is structured properly to fit your unique situation. The language must be specific and the terms must comply with relevant laws. At Blue Chip Estate Planning, our attorney will help you create a Spendthrift Trust that satisfies the law and your needs. To schedule a consultation, fill out the online form or call us at (248) 873-3244.
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