Most people are motivated to create estate plans so their loved ones are protected in their absence. With that said, giving beneficiaries money and other assets isn’t always the right thing to do. If a beneficiary has poor spending habits, you’ll want someone to oversee how those assets are used. An estate planing attorney in Topeka, KS, will show you how spendthrift trusts help you keep assets under control.
Spendthrifts: What Are They?
When someone handles money poorly, they’re said to be a spendthrift. Such tendencies often arise due to addiction, mental illness, or bad influences from others. In any case, handing a spendthrift a substantial inheritance can cause great concern. Thankfully, a trust will help.
Trust Agreements
At its core, a trust is an arrangement where property is held by a party for another person’s benefit. A trust’s provisions and terms are outlined in a document known as a trust agreement. While a living trust is created during a person’s lifetime, a testamentary trust only goes into effect after their passing.
How Spendthrift Trusts Help
A significant advantage of using trusts to distribute inheritances is the retained control over how those funds are used. Spendthrift trusts prevent beneficiaries from wasting their inheritances, but the language used must be very specific. When drafted by a skilled estate planing attorney in Topeka, KS, a spendthrift clause prevents beneficiaries from borrowing against, encumbering, or squandering their inheritances.
Limitations
The state’s laws govern most parts of these agreements, including a spendthrift clause’s validity. The protections of such a trust have limits. For instance, funds may be subject to garnishment for child or spousal support payments.
A spendthrift trust can help you protect your beneficiaries and their inheritances. Call the Debenham Law Office LLC or visit debenhamlaw.com to schedule a consultation.
