Spendthrift Trust Services in Los Angeles
Options for Protecting Your Beneficiaries
While you have full control and access to all your Trust assets during your life, on your death, your Beneficiaries do not have such access and control over their inheritance. Placing spendthrift and asset protection provisions in your Trust protects your Beneficiaries from themselves by shielding their inheritance from your Beneficiaries’ creditors. Such Trusts can be set up for the lifetime benefit of the Beneficiary, and upon the Beneficiary’s death, can be set to distribute to others. The Trustee exercises full discretion as to when, how, and how much the Beneficiary is to receive.
If you are interested in protecting your Beneficiaries or would like to learn more about spendthrift Trusts, we encourage you to reach out to our firm.
How Spendthrift Trusts Work
A spendthrift Trust is somewhat different than other types of Trusts, in that an independent Trustee is granted authority on how and when to grant benefits to the Beneficiary, as well as the amount(s) the Beneficiary will receive. Trusts are only treated as spendthrift Trusts if they include a spendthrift provision or clause designating them so.
These types of Trusts are typically used to protect Beneficiaries that may not be able to control their spending or who have substantial debts or financial liabilities. This can be an incredibly useful tool for people who do not wish to disinherit certain heirs but also want to make sure that such inheritance is not squandered. It is important to note, however, that once assets or funds have been distributed by the Trustee to the Beneficiary, they are no longer protected from the Beneficiary’s creditors; only assets/funds held within the Trust are protected.
Discuss Your Situation with Our Legal Team
If you are interested in establishing a Spendthrift Trust, the Law Offices of Maria N. Jonsson, PC can help.
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