Steele Law Offices, LLC

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Steele Law Offices, LLC

Your home town attorney for life’s legal matters

Pay Now | Visa | MasterCard | American Express | Discover
Photo of Randall P. Steele

Personally investing in each client’s legal
objectives and achieving those goals together.

Photo of Exterior of the Office Building of Steele Law Offices, LLC

Personally investing in each client’s legal
objectives and achieving those goals together.

Photo of Exterior of the Office Building of Steele Law Offices, LLC

Why might I need a spendthrift trust?

On Behalf of | May 25, 2018 | Firm News |

Setting up a trust for your heirs is an effective way to preserve what you have spent a lifetime accumulating — usually. There can be cases where it’s important to go the extra mile and draft and fund a spendthrift trust for some or even all of your beneficiaries.

To be sure, spendthrift trusts are not ideal in all situations. But when they are necessary, they can really help ensure that a beneficiary has a steady income stream for decades when they might need it most.

What is a spendthrift trust?

It’s a lot like what it sounds like, but also so much more. Do you have an heir who never caught on to the finer points of fiscal management? If your beneficiary is at risk of blowing through the principal of the trust in short order, having this system of checks and balances in place can save them from themselves.

Some trust grantors set up spendthrift trusts for beneficiaries who have struggled with their sobriety or other addictions like compulsive gambling. They will still receive disbursements from the trust — and may quickly blow them on dissolute living — but will be unable to touch the bulk of the trust’s assets that are under the oversight of the trustee.

But there are other reasons to consider a spendthrift trust. Suppose you have a grandson as your beneficiary. He’s in a very unstable marriage and you’re worried that if he and his wife split up, she might attempt to lay claim to his trust fund assets.

Typically, trusts can prevent this, but if spouses commingle trust revenues with marital funds, the lines are less clear. A spendthrift trust bolsters those boundaries.

If you’d like to learn more about the ways a spendthrift trust works, speak to your Glen Carbon estate planner today.

Source: The Balance, “How a Spendthrift Trust Can Protect Your Heirs From Themselves,” Joshua Kennon, accessed May 25, 2018

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