A spendthrift trust is a type of trust that you can create if you plan to leave money to someone who you don’t think is responsible enough to manage the assets that you are providing. You work hard for your wealth and you want to ensure that is is not squandered or lost due to the irresponsibility of your loved one. Spendthrift trusts can help to ensure that the assets are safe and actually used to enhance quality of life for the person who you provide them to.
Unsworth LaPlante, PLLC can provide you with assistance in determining if you should create a spendthrift trust. Our legal team can also discuss other kinds of trusts with you so you can select a trust that makes the most sense for your specific situation. Trusts are very powerful legal tools and there are major differences between how different kinds of trusts work so you should always get legal help if you are thinking about incorporating any kind of trust in your estate plan.
Signs You Need to Make a Spendthrift Trust
A spendthrift trust is created if there is someone in your life who you care about and who you want to provide a financial gift for… but who you don’t think is responsible enough to actually handle the money or property you are planning to gift to him.
Some of the key signs that you may need this type of trust include the following:
- The person who you are planning on leaving money to is always in trouble with creditors. If you simply gift assets to someone who has creditors taking legal action against him, then the assets you leave could be lost to creditors shortly after your heir inherits. If you use a spendthrift trust and your designated trust beneficiary doesn’t get access to the principal, you don’t have to worry about creditors just taking the assets.
- The person who you are planning on leaving money to is a big spender. If the person who you are going to make a financial gift towards is continuously making large purchases that you consider irresponsible or unnecessary, then you can likely expect this kind of behavior will continue and accelerate after a big inheritance. If you don’t want the inheritance to be quickly squandered on purchases that you think are not examples of smart spending, a spendthrift trust can help make sure this doesn’t happen by doling out income over time instead of in a lump sum all at once.
- The person who you’re planning to leave property to is not good at managing money. If your chosen heir tends to live beyond his means and spends irresponsibly, you may not just want to hand over a large inheritance with no strings attached.
There may also be other circumstances where a spendthrift trust is appropriate. You should talk with an experienced attorney to find out what a spendthrift trust can do for you and to determine if such a trust would make sense in light of your goals for providing for your loved ones.
Should You Work with a Trust Lawyer if You’re Thinking About a Spendthrift Trust?
If you are thinking about making a spendthrift trust, you should work with an experienced attorney. Your attorney can help you to decide if this type of trust is actually the best choice or if you should explore other trust options. If a spendthrift trust is the best choice, your attorney can help you to follow formalities required to create a valid trust document and can assist you with the process of selecting your trustee and funding your trust.
Trust creation is a complicated process and is a process where you cannot afford to make mistakes. Our legal team understands Vermont laws on trusts and we will work with you at every step of making your trust and planning your legacy.
Getting Help from A Trust Lawyer
Unsworth LaPlante, PLLC can help you to understand all of your options when you are making an estate plan. Trusts are just one of many legal tools that can allow you to protect you assets and take care of the people that you love. We will help you to decide which tools should be a part of your estate plan and will work with you to ensure that you follow legal formalities so those tools actually provide expected protections.
To find out more, download our free estate planning worksheet. You can also give us a call at (802) 879-7133 or contact us online to get personalized advice from a Vermont trust lawyer. Call today to start making your plans to protect your assets and heirs.